The Philadelphia City Wage Tax is a tax on earnings applied to payments that an individual receives from an employer for work or services. All Philadelphia residents owe the City Wage Tax, regardless of where they work. Non-residents who work in Philadelphia must also pay the Wage Tax. Effective July 1, 2021, the rate for residents is 3.8398 percent, and the rate for non-residents is 3.4481 percent.

For non-residents, the Wage Tax applies to compensation for work or services performed in the City and for work performed outside of the City for personal reasons. If an employer requires an individual to work outside of the City, those wages are not subject to the Wage Tax, i.e. the individual is working outside of the City for the “convenience of the employer.” If an employee requests to work remotely for their convenience, wages are subject to the Wage Tax.

The University recognizes that in this evolving environment, different situations will apply across departments. Below are details on how City Wage Tax situations will be managed for individuals who live outside of Philadelphia:

• If the University has requested an individual work remotely for a reason such as repurposing your workspace, the Wage Tax does not apply to your compensation.
• If the University has presented you the option to work remotely and you have elected to do so, the Wage Tax applies to all compensation regardless of where it is performed.
• If the University has repurposed your workspace to a shared space requiring that you work on campus a certain percentage of time and work remotely the balance of the time, the Wage Tax applies only to the compensation for percentage of time worked on campus.
• If your position requires that you are on campus to perform your work or services, the Wage Tax applies to all compensation.

The Wage Tax is applicable to all compensation including paid time off and extra compensation.

Individuals who are required to work remotely must complete a Work Location Certification in DrexelOne. The certification will ensure that payroll taxes are accurately applied and deducted. Visit the Payroll Frequently Asked Questions for instructions on using the certification app.

For specific questions, contact the Payroll Department at payroll@drexel.edu.