Philadelphia wage tax is 3.735% for residents and 3.425% for non-residents from July 1, 2026, so moving to the Main Line alone saves just $1,550 on $500,000. Count your in-city days before you price a move: three days a week in the city could widen that gap to $8,400, if the other two qualify. The catch is the home you'd buy, so run the total against the property tax on the Main Line before calling it a saving.
You work in Philadelphia, or you might, and you're deciding between living in the city and buying on the Main Line. You want the rate, who owes it and what the move changes in dollars.
Philadelphia wage tax at a glance
| Resident rate from July 1, 2026 | 3.735% |
|---|---|
| Non-resident rate from July 1, 2026 | 3.425% |
| Previous rates | 3.74% and 3.43% |
| Residents owe | Wherever they work |
| Non-residents owe | On work in the city |
How much wage tax would I save living on the Main Line?
You'd save 0.31 points on the days you work in the city, and the full rate on the days you don't, so your in-city days decide the answer. If you'd be in the office all five days, the rate alone is a weak reason to buy here. The table prices each pattern, assuming the out-of-city days qualify.
| Earnings | City resident | Non-resident, 5 days in city | 3 of 5 days | 2 of 5 days | No days in city |
|---|---|---|---|---|---|
| $250,000 | $9,338 | $8,563 | $5,138 | $3,425 | $0 |
| $500,000 | $18,675 | $17,125 | $10,275 | $6,850 | $0 |
| $1,000,000 | $37,350 | $34,250 | $20,550 | $13,700 | $0 |
At $500,000, a three-day week brings the saving against a city resident to $8,400, which is $18,675 less $10,275. A resident's bill stays at $18,675 at any of those patterns, because residents owe wherever they work.
Philadelphia wage tax rates from July 1, 2026
Residents pay 3.735% and non-residents 3.425%, down from 3.74% and 3.43%. The July cut is worth $25 a year on $500,000 at either rate. A payroll estimate from before July uses the old rate.
Resident wage tax rate
The 3.735% applies to a Philadelphia resident's pay wherever the job is. Working from home or from a suburban office doesn't lower it. On $500,000 it adds $18,675.
Non-resident wage tax rate
The 3.425% applies to a non-resident's pay for work done in the city. On $500,000 earned entirely in Philadelphia it adds $17,125, and it falls in step with your in-city days from there.
Income-based reduced wage tax rate
A 1.5% rate exists for people approved on PA Schedule SP. It's income-based, so it's unlikely to apply at these home prices. Check the city's page if your income has dropped sharply in a given year.
Do I have to pay Philadelphia wage tax?
You do if you live in Philadelphia, or if you live elsewhere and work in the city. Here's where each situation lands.
Wage tax for Philadelphia residents
Residents owe it wherever they work, so a city resident with a King of Prussia job or a fully remote one still owes 3.735%. That's the one group a remote schedule can't help. It adds $9,338 on $250,000.
Wage tax for Main Line residents who work in the city
Main Line residents owe the non-resident rate for work done in Philadelphia. Your employer withholds it, and if it withholds for days you weren't in the city, you can request a refund. On a two-day week at $500,000 the correct bill is $6,850.
Wage tax for Main Line residents who work outside the city
If you live on the Main Line and don't work in Philadelphia, the wage tax adds $0. Your only local income tax is then your township's, which is zero in Lower Merion and Haverford Township and 0.5% in Easttown. The Pennsylvania income tax page has the township breakdown.
Pay exempt from the Philadelphia wage tax
The city lists pension payments, life insurance proceeds, workers' compensation and active military pay as exempt. A Philadelphia pension adds $0 of wage tax, wherever you live. That removes the rate gap from the decision once your earnings have stopped.
Can I get a wage tax refund for working from home?
A non-resident can request a refund when an employer has withheld for time worked outside the city, and a city resident can't. The employer page doesn't spell out a test for remote days, including whether your employer has to require them, so confirm your situation with Philadelphia Revenue before you count on the number. If your days qualify, the refund on a three-day week at $500,000 is $6,850, the gap between $17,125 withheld and $10,275 owed.
Documenting days for a wage tax refund
- Count your real in-city days for the year from your calendar or badge records.
- Get your schedule and work location in writing from your employer.
- Ask Philadelphia Revenue which form and proof it wants for that year.
- Ask payroll whether it can withhold on the correct share going forward, which beats waiting on a refund.
How to avoid Philadelphia wage tax
You avoid it legally by neither living in the city nor working there, and you reduce it by living outside and working part of the time elsewhere. Moving your home alone only captures the 0.31 points. At $1,000,000 that's $3,100 a year, and the same earner working three days in the city saves $16,800. Choosing a home that makes out-of-city days workable matters more than the rate, so read the Main Line commute guide alongside this table.
The wage tax saving against other Main Line bills
The saving has to beat what the house costs, so run the whole bill. Here's a $500,000 earner, three days a week in the city, on a typical Gladwyne home at Zillow's $1,625,035 for ZIP 19035 (September 2026):
| Annual bill | Philadelphia resident | Gladwyne, 5 days in city | Gladwyne, 3 days in city |
|---|---|---|---|
| PA income tax | $15,350 | $15,350 | $15,350 |
| Philadelphia wage tax | $18,675 | $17,125 | $10,275 |
| Township EIT | n/a | $0 | $0 |
| Estimated property tax | Your parcel's bill | $22,900 | $22,900 |
| Total | $34,025 plus property tax | $55,375 | $48,525 |
So the two choices tie when the Philadelphia home carries a $14,500 property bill on a three-day week, or $21,350 on a five-day week. Look up the city parcel you're comparing, because that's the number your decision turns on. The Gladwyne figure is an estimate from county factors, before homestead relief.
Transfer tax against the wage tax saving
Buying on the Main Line costs transfer tax once, and the wage tax saving has to repay it. At 2% total, a typical Gladwyne home carries $32,501, about $16,250 for a buyer paying half by custom, though the split is negotiable and the local rate should be confirmed with a title company. That takes about 10.5 years to recover at $1,550 a year, or about 2 years at $8,400. The Pennsylvania transfer tax guide has the rate for each municipality.
Easttown EIT credit for wage tax paid
State law requires municipalities to credit their residents for tax paid to Philadelphia on income earned in the city, according to the Local Government Commission's deskbook. Among the five townships compared here, the only confirmed EIT is Easttown's, where 0.5% adds $2,500 on $500,000. Applied to the $300,000 you earn in the city on a three-day week, the credit removes $1,500 of that and leaves $1,000. Ask Keystone Collections Group, Easttown's EIT collector on DCED's register, how to claim it.
Where you lose money on Philadelphia wage tax
- Buying on the Main Line for the rate alone: $1,550 a year on $500,000 against $16,250 of buyer transfer tax on a typical Gladwyne home.
- Leaving withholding on five days when you work three: $6,850 a year on $500,000 tied up until you claim it, if the days qualify.
- Assuming a remote day counts: if your out-of-city days don't qualify, the $8,400 gap falls back to $1,550.
- Working remotely as a city resident: you still owe $18,675 on $500,000, against $10,275 for a non-resident working three days in the city.
Before you rely on any of this, confirm it with a Pennsylvania CPA or tax attorney; it's general information, not tax advice. The rest of the household budget is in the cost of living breakdown for the Main Line, and Reid can help you narrow towns by commute through a private home search.
Philadelphia wage tax FAQs
What is the Wage Tax in Philadelphia?
It's the city's tax on earned pay. From July 1, 2026 the rate is 3.735% for residents and 3.425% for non-residents, down from 3.74% and 3.43%. Residents owe it wherever they work, and non-residents owe it on work done in the city. On $500,000 earned entirely in the city, that's $18,675 for a resident and $17,125 for a non-resident.
Do non-residents pay Philadelphia wage tax?
Yes, at 3.425% on pay for work done in the city. So a Main Line resident working all five days in Philadelphia pays $17,125 on $500,000, and one working three of five days owes $10,275 if the other two qualify as outside the city. A non-resident who does no work in Philadelphia owes nothing. Your employer usually handles it through withholding.
Can I get a wage tax refund for working from home?
If you're a non-resident and your employer withheld for time worked outside the city, you can request a refund. City residents can't, because they owe wherever they work. The city's employer page doesn't spell out a test for remote days, so confirm yours with Philadelphia Revenue, and keep your schedule in writing from your employer. On a three-day week at $500,000, the amount at stake is $6,850.
How much Philadelphia wage tax would I save living on the Main Line?
On the rate alone, 0.31 points: $775 on $250,000, $1,550 on $500,000 and $3,100 on $1,000,000. If you also work outside the city two days in five and those days qualify, the saving on $500,000 grows to $8,400. A city resident can't reach that second number. Compare it with the property and transfer tax on the home you'd buy.
How do you avoid Philadelphia city wage tax?
Lawfully, you avoid it by living outside the city and doing no work there, or you reduce it by working part of your time elsewhere as a non-resident. Pension payments, life insurance proceeds, workers' compensation and active military pay are listed as exempt. A city resident can't reduce it by working remotely. Check any refund claim with Philadelphia Revenue first, since it depends on your days qualifying.
Does a Main Line township also charge wage tax?
No township charges the Philadelphia wage tax, but a township can have its own earned income tax. Lower Merion and Haverford Township have none, and Easttown charges 0.5%, which state law requires it to credit for tax paid to Philadelphia on city-earned income. Ask the collector how to claim that credit. Check Radnor and Tredyffrin through DCED's address lookup.
Sources
- City of Philadelphia: Earnings Tax (employees)
- City of Philadelphia: Wage Tax (employers)
- PA DCED Municipal Statistics: Find Local Withholding Rates by Address (Easttown result, November 5, 2026)
- PA Local Government Commission: Earned Income Taxes deskbook
- PA Department of Revenue: Personal Income Tax
- PA Department of Revenue: Realty Transfer Tax
- Montgomery County: Millage Rates
- PA Department of Revenue: Common Level Ratio Factors
- Zillow Home Value Index, September 2026
Reviewed by Reid Rosenthal
Reid reviewed this page for accuracy on November 5, 2026. Figures come from the sources listed above. Our research process.
Reid Rosenthal is a luxury real estate agent on the Philadelphia Main Line and an Associate Broker who leads The Rosenthal Group at BHHS Fox & Roach, Realtors. RealTrends Verified ranks the team #4 in Philadelphia by sales volume, with $131.59 million across 179 sales in 2025.
- $131.59MTeam sales in 2025, RealTrends Verified
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The Rosenthal Group, Berkshire Hathaway HomeServices Fox & Roach, Realtors, 112 S 19th St, Suite 200, Philadelphia, PA 19103. Office (215) 546-0550. Pennsylvania license AB068320. General information, not legal, tax or lending advice.
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