Payroll News: Philadelphia Wage Tax Reduction Takes Effect July 1, 2017

Payroll News: Philadelphia Wage Tax Reduction Takes Effect July 1, 2017

The first in a series of scheduled reductions to Philadelphia’s City Wage Tax take effect July 1, 2017:

  • The new Wage Tax rate for residents of Philadelphia is 3.8907% (.038907).
  • The new Wage Tax rate for non-residents of Philadelphia who are subject to the Philadelphia City Wage Tax is 3.4654% (.034654).

Any paycheck that Philadelphia-based businesses issue with a pay date after June 30, 2017 must have Philadelphia City Wage Tax withheld at the new rate.

This reduction is part of a long-term initiative to reduce the Wage Tax for residents and nonresidents to their lowest rates in 40 years — declining to 3.6997% for residents and 3.2953% for nonresidents — by the beginning of fiscal year 2022.

For full information on this wage tax reduction, visit the Philadelphia Department of Revenue website.

As always, we are here to help if you have any questions about these new rates or any other payroll concerns. Please don’t hesitate to contact us online or call 215-723-4881.

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