Does Denver have a city income tax? Understanding occupational privilege tax
Denver occupational privilege tax is separate from Colorado income-tax withholding. Check the employee and business portions, actual work location and the relevant payroll month.
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Does Denver have a city income tax?
For a deduction on a Denver pay statement, identify the tax before comparing percentages. Denver’s local employment tax is the occupational privilege tax (OPT), also called a head tax. It is distinct from Colorado income-tax withholding. Calling Denver “tax free” would miss this local obligation.
The City’s business-tax overview lists separate monthly employee and employer amounts. It does not describe OPT as a percentage of annual taxable income. Check the work performed and the calendar month involved rather than applying a state income-tax rate to this deduction.
Who handles the employee and business portions?
Denver’s OPT FAQs, checked 23 October 2026, describe a $5.75 monthly employee portion when Denver-service earnings reach $500 in a calendar month. Employers withhold and remit that portion. The business portion is $4.00 per taxable employee per month; the City also describes separate owner, partner and manager obligations. The employee earnings test does not remove all business OPT obligations.
Ask payroll to identify the local deduction code, which months it covers and whether the employer’s own tax is accounted for separately. A payroll-software label is not a substitute for checking the City’s instructions. This guide does not decide whether a particular payment or person meets the rules.
Residence, remote work and more than one employer
The FAQs explain that living outside Denver or having an employer based elsewhere does not alone exclude OPT. Actual services in Denver matter. For hybrid arrangements, keep a month-by-month work-location record and ask payroll how it supports the treatment used. Do not infer an automatic exemption from the word “remote.”
For multiple Denver employers, the City describes an employee procedure using Form TD269 and a refund route when more than one employer withheld. Follow the linked FAQ’s current form and instructions; do not simply stop withholding without resolving the applicable process.
Filing resources and a payroll preparation checklist
Use the business-tax page and its eBiz link for city registration, returns and payment resources. Denver’s SUTS participation covers sales and use taxes; it does not make SUTS the filing route for OPT. Find the filing frequency and due-date instructions in the OPT FAQs for your account; do not assume every business files monthly.
- Identify the employer account, filing period and person responsible for submitting the city return.
- Reconcile the affected people, work locations, employee withholding and business portion for each month.
- List unresolved owner/partner, multiple-employer and remote-work questions for payroll or the City.
- Keep submission confirmations and payment records with the payroll reconciliation.
When comparing payroll help, ask who will resolve notices and amendments and whether city-tax work is included in the fee. Keep account credentials and employee documents in the employer’s confirmed secure process.
Ask a professional about your situation
Ask whether the practice handles the specific return or filing you need, what the written quote includes and how documents are shared securely. A category listing does not establish credentials or experience with this tax.
Compare professional qualifications and questions to ask. Keep personal tax documents private; this directory does not receive returns, identity documents or portal credentials.
Related guides
Official sources and applicability
- Denver business taxes and eBiz — City tax types, monthly OPT amounts and eBiz versus SUTS scope.
Current official guidance. Checked 2026-10-23. - Denver occupational privilege tax FAQs — Employee earnings test, business portion, work location, multiple employers, TD269 and filing frequency.
Current OPT FAQ checked 2026-10-23; amounts are not a future-year guarantee. Checked 2026-10-23.
Next source review due 2026-11-22, and before promotion for a new tax year. To report an outdated resource, contact the directory without sending personal tax information.