Guide
Philadelphia taxes, explained.
The Wage Tax, the BIRT, the Net Profits Tax and the School Income Tax: who pays each one, at what rate, and when the returns are due.
- Rates as published by the city, October 2026
- Written by the preparers who file these returns
The numbers
What are the current rates?
Four figures cover most questions.
Rates published by the City of Philadelphia as of October 2026. Wage Tax rates took effect July 1, 2026. BIRT, Net Profits Tax and School Income Tax rates are for tax year 2025.
Find your line
Which Philadelphia taxes apply to me?
Most people fit one or two of these rows.
| Your situation | What you pay | What you file |
|---|---|---|
| I live and work in Philadelphia for an employer | Wage Tax at 3.735%, withheld from each paycheck | Nothing to file if the right rate was withheld |
| I live in the suburbs and work in Philadelphia | Wage Tax at 3.425%, withheld from each paycheck | A refund request if your employer required work outside the city |
| I live in Philadelphia and work for an employer outside it | Earnings Tax at the resident rate, if your employer does not withhold | Quarterly Earnings Tax returns |
| I freelance or own an unincorporated business in the city | BIRT and Net Profits Tax | Both returns by April 15, plus estimated payments |
| I own an S corporation or a corporation in the city | BIRT, and Wage Tax on salaries | BIRT return by April 15 and quarterly Wage Tax returns |
| I live in Philadelphia and have dividends or capital gains | School Income Tax at 3.74% | School Income Tax return by April 15 |
Rates published by the City of Philadelphia as of October 2026. Wage Tax rates took effect July 1, 2026. BIRT, Net Profits Tax and School Income Tax rates are for tax year 2025.
What is the Philadelphia Wage Tax?
The Wage Tax is a tax on salaries, wages, commissions and other pay. Philadelphia residents owe it wherever they work. Non-residents owe it on what they earn inside the city. Employers withhold it from each paycheck and send it to the city.
As of July 1, 2026, the rate is 3.735% for residents and 3.425% for non-residents. A year earlier the rates were 3.74% and 3.43%. The city has been lowering them a little each July.
Residents whose employer does not withhold, for example an out of state company, pay the same tax themselves under the name Earnings Tax.
What is the BIRT, and who has to file it?
The Business Income and Receipts Tax applies to every individual, partnership, LLC and corporation doing business for profit in Philadelphia. You file whether or not you made a profit.
It has two parts. For tax year 2025, the gross receipts part was 1.410 mills, or $1.41 for every $1,000 of receipts, and the net income part was 5.71%. The return is due April 15.
Until tax year 2024, the first $100,000 of gross receipts was exempt, and many small businesses skipped the return. That exemption ended with tax year 2025. A new business owes no estimated payment with its first return. From the second year on, an estimated payment equal to the prior year's tax is due with the return.
What is the Net Profits Tax?
The Net Profits Tax falls on the net profit of unincorporated businesses: sole proprietors, partnerships, and LLCs taxed as either. Residents pay it on profit from anywhere. Non-residents pay it on profit from business done in the city.
For tax year 2025 the rate was 3.74% for residents and 3.43% for non-residents. The return is due April 15, with estimated payments on April 15 and June 15. It does not replace the BIRT, though you may be able to take a credit for part of the BIRT you paid on net income.
What is the School Income Tax?
The School Income Tax is paid by Philadelphia residents on certain unearned income: dividends, some kinds of interest, short term capital gains, royalties, S corporation income and some rental and trust income. Wages are not part of it.
The rate for tax year 2025 was 3.74%, and the return is due April 15. People often miss it in the first year they have investment income, because nothing is withheld and no employer mentions it.
What does Pennsylvania add?
Pennsylvania taxes personal income at a flat 3.07%, with no standard deduction and few of the deductions the federal return allows. Residents who work in the city pay it on top of the Wage Tax.
If you live in a suburb with its own earned income tax and work in Philadelphia, the Wage Tax you pay is credited against that local tax, so in most cases you owe nothing more at home on those wages.
On this page
General information
This guide explains the rules in general terms. Your own situation may differ, so ask before you file. The first call is free.
The calendar
When are these due?
City returns share April 15 with the federal and state returns.
| Date | What is due | Who collects it | Time left |
|---|---|---|---|
| Oct 15, 2026 | Extended 2025 individual returns: Form 1040 and PA-40, for anyone who filed an extension in April | Federal Pennsylvania | Upcoming |
| Nov 2, 2026 | Third quarter payroll return, Form 941. October 31 falls on a Saturday, so it moves to Monday | Federal | Upcoming |
| Jan 15, 2027 | Fourth quarter 2026 estimated tax payments, federal and Pennsylvania | Federal Pennsylvania | Upcoming |
| Feb 1, 2027 | W-2 and 1099-NEC forms to recipients and filed, fourth quarter Form 941, and the Philadelphia Wage Tax fourth quarter return | Federal Philadelphia | Upcoming |
| Mar 15, 2027 | 2026 S corporation and partnership returns: Forms 1120-S and 1065, with K-1s to owners | Federal | Upcoming |
Dates that fall on a weekend are shown moved to the next business day. The highlighted row is the next deadline, counted in Philadelphia time.
Questions people ask
Philadelphia taxes, answered.
The questions we hear every week.
Is the Philadelphia Wage Tax going down?
A little each year. The resident rate went from 3.75% to 3.74% on July 1, 2025, and to 3.735% on July 1, 2026. The non-resident rate went from 3.44% to 3.43% to 3.425% over the same period.
Where do I file Philadelphia taxes?
Online at the Philadelphia Tax Center, the city's filing and payment site. BIRT, Net Profits Tax, School Income Tax, Earnings Tax and employer Wage Tax returns are all filed there.
Can I get a Wage Tax refund?
In two common cases. Non-residents can request a refund for days their employer required them to work outside the city. And employees who qualify for Pennsylvania's tax forgiveness program can apply for the city's reduced rate of 1.5% and a refund of what was withheld above it.
I never filed a BIRT return. What should I do?
File the missing years before the city writes to you. Voluntary filing usually costs less in penalties, and it keeps your Commercial Activity License in good standing. We prepare the back returns and request penalty relief where the rules allow.
Are these rates current?
They are the rates published by the City of Philadelphia as of October 2026: the Wage Tax rates took effect July 1, 2026, and the BIRT, Net Profits and School Income Tax rates are for tax year 2025, the latest returns filed. The city updates rates each year, usually by June.
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