Employees. If you're an employee of a company located in Pennsylvania, Wage Tax will be automatically withheld from your paycheck. The BIRT can be filed and paid online.Remember that you must keep records to prove the unreimbursed business expenses you deduct and provide the documentation when filing a PA Schedule UE. You can't deduct expenses that are lavish or extravagant, or that are for personal purposes. This form allows the employee to verify that the employer is withholding the correct tax rates for the correct municipalities. Following is a list of business activities that will subject an out-of-Philadelphia business to the. Is the Philadelphia Business Privilege Tax deductible as a business expense? The Philadelphia Business Privilege Tax includes two components: Gross receipts tax based on revenue; and Net income tax based on net income. You will also need to complete federal. Form 4562, Depreciation and Amortization.