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Employer Withholding

City Requirements

All Philadelphia employers must apply for a business tax account number from the City so you can begin withholding taxes. You can register online or call (215) 686-6600 to learn more.

Philadelphia further requires employers to withhold City Wage Tax, also called the Earnings Tax, from wages of employees who work or reside in Philadelphia. Visit the City's Revenue Department site for filing frequency and further details about the Wage Tax.

State Requirements

You must also withhold Pennsylvania Personal Income Tax from wages for your employees residing in Pennsylvania, whether they provide services within or outside the state. PA income tax is also withheld from non-residents who provide services performed within Pennsylvania.

Visit the PA Open for Business web site to register for Employer Withholding Tax with the Department of Revenue.

Federal Requirements

Of course you are also required to withhold Federal Income Tax from employees' paid wages. Visit the IRS website to obtain:

Exceptions

There are a number of occupations and work circumstances not subject to withholding, including independent contractors. Independent contractors are not employees; from a tax standpoint, they are more like vendors. Therefore you do not have to pay Medicare, FICA, state or federal unemployment tax, or worker’s compensation insurance for them.

Other exceptions include some benefit programs. While some are subject to taxation, others are not. Refer to the Employer Withholding Information Guide for more information about these exceptions.

Filing

For where and when to file Philadelphia taxes, and to order payment coupon booklets, visit the Philadelphia Revenue Department website.

For safe, easy, and convenient filing of Pennsylvania taxes, register online at etides (Electronic Tax Information and Data Exchange System), the State's free online tax filing system.

Refer to the Pennsylvania Department of Revenue website for more information about PA tax compliance issues.

To e-file federal returns, visit the IRS e-filing page.