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How the Philadelphia Wage Tax Works (2026)
The Wage Tax is a flat percentage of gross wages — there is no standard deduction or bracket. Residents pay 3.735% on all wages regardless of where the work is done. Non-residents pay 3.425% on wages for work physically performed in Philadelphia. It is withheld by your employer alongside federal, FICA and Pennsylvania state tax.
| Who | Wage Tax rate | Applies to |
|---|---|---|
| Philadelphia resident | 3.735% | All wages, anywhere |
| Non-resident working in Philadelphia | 3.425% | Philadelphia-sourced wages only |
Rates are on a multi-year phased reduction. The figure above is effective 2026-07-01. Pennsylvania's separate 3.07% Personal Income Tax also applies; the rest of Pennsylvania's ~2,900 municipalities levy their own Earned Income Tax (typically 1%+) which is not computed here.
Philadelphia Wage Tax FAQ
What is the Philadelphia Wage Tax rate for 2026?
The Philadelphia City Wage Tax is 3.735% for residents (on all wages, wherever earned) and 3.425% for non-residents on wages earned from work performed in Philadelphia, effective 2026-07-01 as part of a phased reduction. It applies to gross wages with no deductions.
Do non-residents pay Philadelphia Wage Tax?
Yes - non-residents pay 3.425% on the portion of wages earned working inside Philadelphia. Employers withhold it automatically; if you work partly outside the city you may be able to file for a partial refund with the Department of Revenue.
Is the Philadelphia Wage Tax on top of Pennsylvania state tax?
Yes. Pennsylvania's flat 3.07% Personal Income Tax applies statewide; the Philadelphia Wage Tax is a separate city tax on top of it. Total state + city income tax for a Philadelphia resident is about 6.80%.
Does the Philadelphia Wage Tax apply to a bonus?
Yes - the Wage Tax applies to bonuses and other supplemental wages at the same rate as regular pay. Use the Pennsylvania bonus tax calculator for a bonus estimate.
Methodology & Source
Philadelphia Wage Tax rates from City of Philadelphia Department of Revenue — Wage Tax / Earnings Tax rates (https://www.phila.gov/services/payments-assistance-taxes/taxes/income-taxes/earnings-tax-employees/). Rate effective 2026-07-01 (part of a 5-year phased reduction plan); cross-checked against a second secondary source 2026-07-29. Pennsylvania's flat 3.07% Personal Income Tax from the Pennsylvania Department of Revenue (72 P.S. § 7302). Federal brackets, standard deductions and FICA constants from the IRS (Revenue Procedure 2025-32). Wage Tax is computed on gross wages; the Pennsylvania state figure uses the same engine as the Pennsylvania calculator. Last verified: 2026-07-26.