Quick Answer
Philadelphia's BIRT is a city business tax with two parts: 0.1415% on gross receipts and 6.2% on net income over $100,000. Most freelancers pay only the receipts portion — so a freelancer earning $75,000 annually pays about $106 in BIRT.
Best Answer
James Okafor, EA
Established freelancers who need comprehensive BIRT planning and compliance strategies
What is Philadelphia's BIRT tax?
The Business Income & Receipts Tax (BIRT) is Philadelphia's city-level business tax that applies to virtually all business activity within city limits. Unlike most taxes, BIRT has two separate components: a gross receipts tax (0.1415% of all revenue) and a net income tax (6.2% of profits over $100,000).
For most freelancers, you'll primarily deal with the gross receipts portion since the net income tax only kicks in after $100,000 in annual profit.
Example: $75,000 freelance graphic designer
Let's say you're a graphic designer earning $75,000 annually in Philadelphia:
Gross Receipts Tax Calculation:
Net Income Tax Calculation:
Total annual BIRT: $106.13
How BIRT affects different income levels
*Net income assumes 25-30% business expense rate*
Key factors that affect your BIRT liability
What you should do
1. Register with Philadelphia: File a Business Income & Receipts Tax Account Application if you haven't already
2. Track Philadelphia-specific income: Separate income earned in the city from other locations
3. Make quarterly payments: If you expect to owe more than $300 annually in BIRT
4. Keep detailed records: Document all business expenses to maximize deductions and minimize net income
[Use our quarterly estimator →](quarterly-estimator) to calculate your BIRT payments alongside federal and state estimated taxes.
Key takeaway: Most Philadelphia freelancers pay only 0.1415% of their gross receipts in BIRT — about $106 per year on $75,000 in revenue. The 6.2% net income tax only applies to profits over $100,000.
Key Takeaway: Philadelphia freelancers typically pay only the 0.1415% gross receipts portion of BIRT, averaging about $106 annually on $75,000 in revenue.
BIRT liability by annual freelance revenue level
| Annual Revenue | Gross Receipts Tax (0.1415%) | Net Income Tax (6.2%) | Total BIRT |
|---|---|---|---|
| $25,000 | $35.38 | $0 | $35.38 |
| $50,000 | $70.75 | $0 | $70.75 |
| $75,000 | $106.13 | $0 | $106.13 |
| $100,000 | $141.50 | $0 | $141.50 |
| $150,000 | $212.25 | $1,240 | $1,452.25 |
More Perspectives
James Okafor, EA
First-time freelancers who need to understand if and when they need to register for BIRT
Do I need to worry about BIRT as a new freelancer?
If you're doing any freelance work in Philadelphia — even part-time or side gigs — you technically need to register for BIRT. However, the practical impact depends on your income level.
When BIRT registration is required
Real-world example: Part-time freelancer
Say you're testing freelance writing while keeping your day job, earning $15,000 in Philadelphia clients:
What new freelancers should know
Most new freelancers will pay under $50 annually in BIRT, but registration and filing are still legally required.
Key takeaway: Even small-scale Philadelphia freelancers must register for BIRT, but most pay under $50 annually — about $2-4 per month.
Key Takeaway: New Philadelphia freelancers must register for BIRT regardless of income level, but most pay under $50 annually on their first-year earnings.
Sources
- Philadelphia Department of Revenue - BIRT Information — Official Philadelphia BIRT rates, filing requirements, and registration process
- IRS Publication 334 — Tax Guide for Small Business - includes guidance on local business tax obligations
Reviewed by James Okafor, EA on February 28, 2026
This content is for educational purposes only and is not a substitute for professional tax advice. Consult a qualified tax professional for advice specific to your situation.