Philadelphia Wage Tax Calculator — Resident & Non-Resident Rates

The Philadelphia wage tax is one of the oldest and highest municipal income taxes in the United States. It applies to:

Residents (3.75%): All wages, salaries, commissions, and other compensation — regardless of where the work is physically performed. A Philadelphia resident working remotely from their Philadelphia home for a New Jersey employer owes 3.75% Philadelphia wage tax on all earnings.

Non-residents (3.44%): Only wages earned from work physically performed inside Philadelphia city limits. The taxable amount is apportioned based on the fraction of work days spent in Philadelphia:

Non-resident taxable wages = Annual wages × (Philly days ÷ Total work days)
Non-resident wage tax = Taxable wages × 3.44%

Comparison: A resident earning $150,000 owes $5,625/year. A non-resident who spends 20% of their time in Philadelphia on the same salary owes only $1,032/year — an $4,593 annual difference that makes suburban living financially attractive for city-employed workers.

The wage tax is withheld by employers and remitted to the City of Philadelphia. Self-employed individuals pay through the Business Income and Receipts Tax (BIRT).

Use this calculator when:

• Evaluating hybrid work arrangements — Quantify exactly how many Philadelphia days trigger meaningful wage tax cost. At 3.44%, going from 50 to 100 Philadelphia days on a $150,000 salary adds $2,580/year.
• Comparing city vs. suburban living — The 3.75% resident rate vs. a low-or-zero apportioned non-resident rate is often a deciding factor in where to live. This calculator shows the dollar difference.
• Checking paycheck withholding — Verify that your employer is withholding the correct Philadelphia wage tax amount, especially if you recently changed from in-office to hybrid to fully remote.
• Negotiating remote work policy — Employees with salary negotiating power can quantify the tax benefit of a more remote-heavy schedule.
• Tax planning for Philadelphia-based employers — Businesses need to understand wage tax exposure for employees who live outside the city but work in Philadelphia offices.