July 05, 2018

Pennsylvania, Philadelphia Wage Tax Rates

Employers in Philadelphia are to implement reduced withholding of its wage tax from workers in the city starting July 1, 2018, the city's Department of Revenue said June 21.

The new rates used to calculate net pay after June 30 are 3.8809 percent for residents of Philadelphia and 3.4567 percent for nonresidents who work in the city.

Paychecks issued by businesses with a pay date after June 30, 2018 must have Philadelphia city wage tax withheld at the new rates, the city said.

The city is gradually reducing its wage tax rates so that by fiscal 2022, workers in Philadelphia can expect the tax rates to drop to 3.6997 percent for residents and 3.2953 percent for nonresidents. The wage tax rates include a 1.5 percent Pennsylvania Intergovernmental Cooperation Authority tax.

Reproduced with permission. Published June 22, 2018. Copyright 2018 by The Bureau of National Affairs, Inc. (800-372-1033) <http://www.bna.com>