Is Philadelphia Expensive to Live In?

Living in Philadelphia, Pennsylvania, presents a diverse financial landscape, making the perception of its expensiveness highly subjective. An individual’s lifestyle, income, and priorities significantly influence how affordable the city feels. Understanding the various components of the cost of living provides a clearer picture for those considering Philadelphia as a place to reside. This article will explore the financial aspects of living in the city, breaking down key expenses.

Housing Costs

Housing represents the most substantial living expense in Philadelphia. Rental costs vary by neighborhood and apartment size. As of August 2025, average rents are around $1,404 for a studio, $1,753 for a one-bedroom, and $2,198 for a two-bedroom.

For home purchases, the median sale price in Philadelphia was $270,000 in July 2025, with a median listing price of $280,000. This figure reflects a competitive market. Property taxes are 1.3998% of a property’s taxable value. The average homeowner’s property tax bill is projected to be about $2,300 in 2025.

Utility costs are an integral part of housing expenses. The average monthly utility bill for a Philadelphia resident is approximately $275.13, covering gas, electricity, and water. Internet service adds another $75.33 per month.

Everyday Expenses

Daily living costs extend beyond housing to include necessities like groceries, transportation, and various recurring utilities. Groceries in Philadelphia are generally about 4% more expensive than the national average. An individual in Philadelphia can expect to spend approximately $280.56 per month on groceries. For a household in Pennsylvania, the annual expenditure on food at home is estimated at $7,200.

Transportation expenses are a regular consideration for residents. Public transit, managed by SEPTA, offers various fare options. A single ride on a bus, subway, or trolley costs $2.50 using a SEPTA Key card or contactless payment, aligning with cash fares. For more frequent commuters, a weekly TransPass is $31, and a monthly TransPass is $116. While public transit is a viable option, owning a car involves additional costs such as fuel, insurance, and parking, which can vary significantly.

Beyond the basic utilities tied to housing, other essential services contribute to monthly expenditures. The average monthly cost for basic utilities (electricity, heating, cooling, water, and garbage) for a 915 sq ft apartment is reported around $193.22, with internet adding approximately $64.83. These figures contribute to an overall average monthly utility cost of about $258.05 for an individual. Leisure activities and dining out also factor into everyday spending; for instance, the cost of eating out can range from casual to mid-range dining experiences.

Additional Financial Considerations

Several other financial commitments contribute to the overall cost of living, though they may not be daily or monthly occurrences for every individual or household. Healthcare expenses, encompassing insurance premiums, co-payments, and out-of-pocket costs, represent a significant variable. While specific Philadelphia averages are not available, employees in Pennsylvania pay an average of $1,784 annually for employee-sponsored health insurance coverage. These costs are highly individualized based on health needs and insurance plans.

For families with young children, childcare is a substantial financial outlay. The average monthly cost for childcare for a single child in the Philadelphia region is around $961. Infant care in Philadelphia can be considerably higher, averaging about $2,569 to $2,661 per month, or approximately $14,483 annually for center-based care. For some families, sending two children to daycare can cost more than their monthly rent.

Taxes also impact disposable income. Philadelphia imposes a City Wage Tax on earnings, which for residents is 3.74% and for non-residents working in the city is 3.43%, effective July 1, 2025. This tax applies regardless of where a resident works, and for non-residents, it applies to work performed within the city. Additionally, Pennsylvania has a flat individual income tax rate of 3.07%. The sales tax in Philadelphia is 8%, comprising the 6% state sales tax and an additional 2% local sales tax.

Income and Affordability

Understanding the income landscape in Philadelphia provides context for the city’s affordability. The median household income in Philadelphia was $60,698 in 2023, which is lower than the national median. This figure suggests that households generally have less disposable income compared to the national average, potentially affecting their ability to afford various expenses. For family households, the median income was $71,024 in 2023, while non-family households had a median income of $45,022.

The job market in Philadelphia, with its diverse industries, influences the earning potential for residents. In terms of income distribution across age groups, householders aged 25 to 44 years typically report the highest median household income at $72,032. While Philadelphia offers a range of employment opportunities, the median income levels highlight the importance of careful financial planning to comfortably cover the city’s expenses. The relationship between earnings and the cost of living ultimately determines an individual’s financial comfort in the city.