Philadelphia Tax Rate Changes Starting July 1st

Philadelphia is changing the rate of its:

• wage tax;
• earnings tax;
• net profits tax; and
• school income tax.

The changes are effective July 1, 2021.

Reduced Rates

The new resident rate for the wage tax, earnings tax, and net profits tax is 3.8398% (previously 3.8712%). The non-resident rate is now 3.4481% (previously 3.5019%).

Employers must begin withholding wage tax at the new rate from all paychecks issued to residents and non-residents after June 30, 2021.

School Income Tax

The school income tax rate is also changing. As of July 1, 2021, the rate for residents will be 3.8398% (previously 3.8712%).