The Wage Tax must be filed quarterly and paid on a schedule that corresponds with how much money is withheld from employees' paychecks. The State of New Jersey and the Commonwealth of Pennsylvania have an agreement relative to state income withholding taxes.No, if employed in Philadelphia, you may use the Philadelphia Wage Tax as a credit against your liability for the township tax. Employee Name: first, middle initial, last. Philadelphia and Chester, for example, levy the state's highest local income tax rate of 3.75 percent. Employee Name: first, middle initial, last. Your employer would be required to withhold Delaware taxes as long as you work in Delaware. Delaware Resident Working Out of State. And State. Withholding. All Philadelphia residents owe the City Wage Tax, regardless of where they work.