In a taxpayer friendly move, the City of Philadelphia has announced that it will be reducing the City’s Wage Tax rates. Specifically, starting July 1, 2018 the new rates will be:
Residents of Philadelphia - 3.8809%
Non-residents of Philadelphia - 3.4567%
This means that all paychecks issued by businesses with a pay date after June 30, 2018 must have Philadelphia City Wage Tax withheld at the new rates.
In addition, for tax year 2018 the City announced that Philadelphia’s Net Profit Tax (NPT) will also be reduced to 3.8809% for City residents and 3.4567% for non-residents.
Finally, for tax year 2018, the Philadelphia School Income Tax (which is imposed only on residents of Philadelphia) will decrease to 3.8809%.
Please contact us if you have any questions on how this may impact your business.