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W-2 Income Earners

If you are paid by W-2, confirm that your employer is withholding the City Wage Tax. If they are you have no filing obligation with the City.

Wage Earners Working in Philadelphia

Individuals who perform services for an employer receive Federal Form W-2 - Wage and Tax Statement. Employers who have a physical location within or engage in business within Philadelphia are required to withhold the Philadelphia Wage Tax from all Philadelphia residents and on nonresidents to the extent their services were rendered in or performed within Philadelphia.

Employers not conducting business within Philadelphia but who maintain a location within the Commonwealth of Pennsylvania and employ Philadelphia residents are required to withhold and remit the Wage Tax on behalf of these Philadelphia resident employees. The employer files the Wage Tax on behalf of these employees and generally no other filing requirement is necessary on the part of the employee.

Wage Earners Not Working in Philadelphia

An employer who has no location within Philadelphia (or the Commonwealth of Pennsylvania) and is not otherwise engaging in business within Philadelphia cannot be compelled to withhold and remit the tax on their Philadelphia resident employee.

There are instances where an employer will not be required to withhold and pay the tax on behalf of the employee. For example, a Philadelphia resident individual employed by a New Jersey employer (who is not subject to the BIRT) will need to file as an individual directly with the City of Philadelphia. The New Jersey employer who has no location within Philadelphia (or the Commonwealth of Pennsylvania) and is not otherwise engaging in business within Philadelphia cannot be compelled to withhold and remit the tax on their Philadelphia resident employee. That fact however does not relieve the Philadelphia resident of their individual Wage Tax obligation and he or she will be required to file a quarterly Earnings Tax return directly with the Department of Revenue.

In situations where an employer was required to withhold and remit the Wage Tax but failed to do so, the employee is not relieved of the tax obligation. In those instances the employee should register with the Department for an Earnings Account and file the required returns.

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