Philadelphia to Cheltenham Township
Pennsylvania Act 32 local earned income tax · PHILADELPHIA to MONTGOMERY County · tax year 2026
Home rate
3.74%
Philadelphia, residents
Work rate
1%
Cheltenham Township, non-residents
You pay
3.74%
the higher of the two
Cost of the commute
$0
a year, above the home rate
What this commute costs you
no extra local taxPhiladelphia already charges its residents more than Cheltenham Township charges commuters, so the home rate governs and the job adds nothing at all. You pay the solid bar only — Pennsylvania charges the higher of the two rates, never their sum. Local earned income tax only; state, federal and payroll tax apply on top.
What this commute actually costs
- Nothing changes for this commute. A resident of Philadelphia pays about 3.74% either way. It makes no difference whether they work at home or travel to Cheltenham Township. The home rate is the higher of the two, and the higher one wins. That is $2,244 a year.
- A busy route. Cheltenham Township takes about 2,097 workers from Philadelphia, which puts it 17 out of 69 destinations for the municipality. Not a corner case.
- The Philadelphia to Cheltenham Township commute is tax-neutral. Philadelphia's resident rate of about 3.74% is not exceeded by Cheltenham Township's non-resident rate, so under the state's rule the resident rate applies and the effective figure is about 3.74% — $2,244 annually at the reference salary. Withholding is remitted to the residence in full and the work location receives no share.
- Cheltenham Township ranks 17 of 69 destinations recorded for Philadelphia, at 2,097 workers. This places the route among the municipality's primary employment links and gives the rate treatment above broad application.
Where the money goes
A $75,000 salary
- Federal income tax$7,670
- Social Security and Medicare$5,738
- State income tax$2,303
- Yours$59,290
| Federal income tax10.23% | $7,670 |
|---|---|
| Social Security and Medicare7.65% | $5,738 |
| State income tax3.07% | $2,303 |
| Yours79.05% | $59,290 |
The arithmetic, side by side
| If you worked in Philadelphia | $2,244 |
|---|---|
| Working in Cheltenham Township | $2,244 |
| Difference | $0 |
On a reference salary of $60,000 a year. The local tax is flat, so every figure scales with your own pay.
What this page does not cover
- One thing worth being clear about, because it catches people out. You are not charged by both places. Philadelphia and Cheltenham Township do not add their rates together. Pennsylvania picks the higher of the two, and that is what you pay. Adding them would roughly double the bill.
- Only one tax is on this page. It is the local earned income tax that Philadelphia and Cheltenham Township levy. State tax, federal tax and Social Security all still apply. All three are the same wherever in Pennsylvania you work.
- The dollar figures use a flat reference salary of sixty thousand a year. That is a benchmark, not an average for Philadelphia. No wage data exists for single municipalities, and inventing one would be worse. Scale the numbers to your own pay. The rate for the Cheltenham Township commute is what matters, and it does not change with income.
- Two practical cautions. Postal addresses and taxing boundaries do not always agree. Your post may say Philadelphia while your taxing municipality is a different one. Pennsylvania publishes an official lookup to settle it. The same caution applies at the Cheltenham Township end. Philadelphia is a special case too, with its own wage tax.
- Pennsylvania's local rule is a greater-of rule, not an additive one: the liability for a Philadelphia resident working in Cheltenham Township is the higher of the two applicable rates, not their sum. The distinction is worth stating plainly because the additive reading is intuitive and would overstate the charge by roughly a factor of two. What is divided between the municipalities is the remittance, not the worker's liability.
- The scope here is the municipal earned income tax alone. State, federal and payroll taxes are unaffected by the choice between Philadelphia and Cheltenham Township and are therefore outside the model. A total tax position requires adding them; a comparison of the two locations does not.
- Dollar amounts are computed against a stated reference salary rather than a municipal wage average, which does not exist for Pennsylvania municipalities in any published source. Because the local tax is flat, the rate is invariant to income and the figures scale linearly — the Philadelphia to Cheltenham Township differential doubles at twice the salary and halves at half of it.
- Two caveats bear on accuracy. First, postal addresses and municipal taxing boundaries diverge frequently in Pennsylvania, so a Philadelphia address should be confirmed against the DCED municipal lookup before relying on the Philadelphia rate. Second, Philadelphia administers its wage tax outside this framework, with its own resident and non-resident rates and its own credit arrangements, so any pairing touching it should be checked against the city's own schedule.
Questions people ask
Do I pay local tax twice — once where I work and once where I live?
The rates compete rather than stack. about 3.74% where you live, about 1% where you work, and you pay the greater of the two.
Does working in a different town cost me anything?
On this route, nothing. You owe exactly what you would have owed working at home — the boundary is real on a map and invisible on your pay stub, which is not true of every pair of towns here.
Which town's rate am I actually paying?
Philadelphia sets it. Your residence rate is the larger, so it governs regardless of where the job is.
Is this a common enough commute to be worth modeling?
2,097 workers make it. The pairing comes from federal commuting data rather than from guesswork, and thin routes are excluded rather than estimated.
How does Pennsylvania's local earned income tax law allocate liability between two districts?
Pennsylvania's local earned income tax law assigns the higher of the residence rate (about 3.74%) and the non-resident work rate (about 1%); liabilities are never summed. The employer withholds at the governing rate and remits through the work district's collector, which then distributes to the residence district.
Why is the marginal cost of this crossing zero?
Marginal liability from working outside the residence jurisdiction is zero on this route. The crossing alters the distribution of revenue between jurisdictions but not the employee's total. ⚠️ This is route-specific and does not generalise to other pairs in the same dataset.
Which district's rate governs on this route?
The residence rate equals or exceeds the work district's non-resident rate and therefore governs. Working outside the residence district does not increase employee liability on this route; it affects only inter-district distribution.
What is the basis for including this route?
Route volume is 2,097 workers, sourced from Census LODES origin-destination data. Pairs below the publication threshold are excluded rather than imputed, so page existence reflects measured commuting volume.