Philadelphia City Wage Update as of July 1
As inflation continues to sweep the country causing prices to rise, one cost that is about to drop is Philadelphia’s city wage tax.
Effective July 1, the city wage tax rate is set to drop 0.05% for resident workers. Council and Mayor Jim Kenney’s administration also agreed to cut the net income portion of the Business Income and Receipts Tax (BIRT) — which applies to any person or business pursuing profit — from 6.2% to 5.99%. Supporters of these decreases see them as an opportunity to help small businesses.
2022-2023 Philadelphia City Wage Tax Rate
The wage tax rate is set to drop from 3.84% to 3.79% for resident city workers. Based on the average median household income in Philadelphia of around $49k, that’s a savings of about 47 cents per week.
For non-residents, the savings are even more minuscule. It is just a 0.008% decrease in wage tax for non-residents who work in Philadelphia, bringing it from 3.4481% to 3.44%. Applied to a median household income of roughly $90k, this decrease comes out to about 14 cents per week.
| Effective July 1, 2021 | Effective July 1, 2022 | |
| Resident |
3.8398% | 3.79% |
| Non-Resident | 3.4481% |
3.44% |
For more information, see our Abacus Payroll Tax Alerts for more wage and payroll tax rates.
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