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Earnings Tax

Overview

The Earnings Tax is a tax on salaries, wages, commissions and other compensation paid to an employee who is employed or renders services to an employer.

The City of Philadelphia is not a party to any reciprocal tax agreements with any other municipality. Non-residents of Pennsylvania cannot claim a tax credit against Philadelphia Earnings Tax for income taxes paid to any other state or political subdivision. Residents of Philadelphia employed outside of Pennsylvania may be required to file and pay a local income tax in that jurisdiction in addition to Philadelphia Earnings Tax.

The Earnings Tax must be filed and paid quarterly along with an annual reconciliation at the end of each calendar year.

Who Must File

The Earnings Tax must be filed and paid by Philadelphia residents or non-residents who work in Philadelphia who do not have the City Wage Tax withheld from their paycheck. The most common situation that requires the filing and payment of the Earnings Tax is those who work for out of state employers. They are not required to withhold Philadelphia’s wage tax. Earning Tax is taxed at the same rates as the wage tax for residents and non-residents.

You must apply for an Earnings Tax account. You can do so on-line or by filling out and mailing in the application form. Your Social Security number will be your Earnings Tax account number.

Exclusions from Earnings Tax

  • Those who have City Wage Tax withheld from their paycheck
  • Individuals and partners that file and pay the Net Profits Tax

Overview

Tax Type Code
02

Rate
3.924% (Resident)
3.495% (Non-Resident)

Mail Returns to 
Philadelphia Dept. of Revenue  
PO Box 1648 
Philadelphia, PA 19105‐1648