City Gig Tax Guide
Philadelphia Gig Worker Taxes
Philadelphia is one of the few U.S. cities that taxes self-employed people directly — so as a gig worker here you face a city tax most independent contractors never deal with, on top of Pennsylvania state tax and the federal 15.3% self-employment tax. Here's how the city's Net Profits Tax and Business Income & Receipts Tax work for gig workers.
← Part of the complete Gig Worker Taxes guideHow gig taxes work for Philadelphia workers
You're an independent contractor — nothing is withheld
Gig platforms pay you as a 1099 contractor, not an employee, so no income or payroll tax comes out of your payouts. You're responsible for setting aside and paying your own taxes.
Federal self-employment tax is 15.3%
That's 12.4% Social Security + 2.9% Medicare on your net earnings — the employer-plus-employee share that a regular job would split with you. It applies in every state, on top of federal income tax.
Federal income tax applies to your net profit
After deductions, your net gig profit is added to your other income and taxed at your federal rate. You can deduct half of your self-employment tax when figuring federal income tax.
Report all income — even without a 1099
You must report every dollar you earn whether or not a platform sends a 1099-NEC or 1099-K. Reporting thresholds for the forms change year to year; your obligation to report does not.
Does Philadelphia have a local tax for gig workers?
Yes. Philadelphia is unusual in taxing self-employed people directly through the Net Profits Tax (NPT). The city's better-known Wage Tax is withheld from employees' paychecks — but as a gig worker you're not an employee, so instead you owe NPT on your net business profit. Residents owe NPT on all their net profit; nonresidents owe it on the profit from work done in Philadelphia.
Many self-employed Philadelphians also have to file the Business Income & Receipts Tax (BIRT), the city's tax on doing business in Philadelphia, though there's a filing exclusion for businesses under a gross-receipts threshold. These city taxes are on top of Pennsylvania's flat state income tax and the federal 15.3% self-employment tax.
Rates, the BIRT exclusion amount, and filing rules change, so confirm the current figures and whether BIRT applies to you with the Philadelphia Department of Revenue or a tax professional. You file and pay these with the city, separately from your state and federal returns.
This Net Profits Tax is a local tax on top of federal and Pennsylvania state tax — the 15.3% federal self-employment tax is the same everywhere, and your state tax is a separate layer.
What Philadelphia gig workers can deduct
Business mileage
Every mile driven while online or on a job, deducted at the IRS standard mileage rate. Usually the single largest deduction — keep a contemporaneous log.
Phone & data
The business-use percentage of your phone and data plan — you cannot accept jobs without it.
Supplies & equipment
Insulated bags, phone mounts, chargers, and other gear bought specifically for the work.
Tolls & parking
Tolls and parking paid while working are deductible (ordinary commuting tolls are not).
The same deductions that lower your federal and state tax also lower the net profit your local tax is figured on. Keep a contemporaneous mileage log and save receipts either way.
Quarterly estimated taxes
Because no tax is withheld from your payouts, the IRS expects you to pay as you go through quarterly estimated payments rather than one lump sum in April. If you expect to owe $1,000 or more in federal tax for the year, paying quarterly avoids an underpayment penalty.
Federal estimated payments are generally due around April 15, June 15, September 15, and January 15 of the following year. Pennsylvania expects its own state estimates on a comparable schedule, and Philadelphia's local tax may have its own filing and payment requirements — see the city and state resources below for the exact forms and due dates.
Frequently asked questions
Do Philadelphia gig workers pay the Wage Tax?
No — the Philadelphia Wage Tax is withheld from employees' paychecks. As a self-employed gig worker you instead owe the Net Profits Tax (NPT) on your net business profit, and possibly the Business Income & Receipts Tax (BIRT).
What is the Philadelphia Net Profits Tax?
The NPT is a Philadelphia tax on the net profits of self-employed individuals and unincorporated businesses. Residents owe it on all their net profit; nonresidents owe it on profit from work performed in Philadelphia. It's separate from, and on top of, Pennsylvania state income tax.
Do I have to file BIRT as a gig worker in Philadelphia?
Often yes if you're doing business in the city, but Philadelphia provides a filing exclusion for businesses with gross receipts under a set threshold. The threshold and rules change, so confirm whether BIRT applies to you with the Philadelphia Department of Revenue.
Are Philadelphia city taxes on top of Pennsylvania state tax?
Yes. The Net Profits Tax and BIRT are city taxes that apply in addition to Pennsylvania's flat state income tax and the federal income and 15.3% self-employment taxes. Gig workers in Philadelphia can face all of these layers.
How much should I set aside for taxes in Philadelphia?
Beyond the common 25–30% for federal income tax and the 15.3% self-employment tax, factor in Pennsylvania's flat state tax and the city's Net Profits Tax (and BIRT if it applies), so many set aside more. Use the Tax Set-Aside calculator and confirm current city rates with the Department of Revenue.
Authoritative resources
Federal (IRS)
- IRS: Self-Employed Individuals Tax Center ↗
- IRS: Self-Employment Tax (Social Security and Medicare) ↗
- IRS: Estimated Taxes ↗
- IRS: Standard Mileage Rates ↗
Philadelphia & Pennsylvania tax agencies
Free calculators
Stop guessing what you owe
UnifyOne tracks your gig earnings, mileage, and tax set-aside automatically — so quarterly taxes in Philadelphia are never a surprise.
This guide is educational information, not tax advice. Federal, state, and local tax rules, rates, thresholds, and the IRS standard mileage rate change yearly — confirm current figures with the IRS, the Pennsylvania tax agency, the Philadelphia revenue office, or a qualified tax professional for your situation.