Are you looking for a simple guide to answer your question, “What is the Occupational Privilege Tax in Denver?” You’re in luck! You’ve found the best Denver tax and accounting services to walk you through all your questions. When it comes to OPT in Denver, it’s important to know that if you work or run a business in the city, this tax (often called the “head tax”) can pop up fast. In this guide, we’ll explain it all in plain English, show who owes it, and outline what to hand your payroll provider so nothing gets missed.
What is the Occupational Privilege Tax in Denver?
What is the Occupational Privilege Tax in Denver? It’s a small monthly tax tied to working inside Denver city limits. There are two parts: an employee portion (usually withheld from the paycheck) and an employer portion (paid by the business). If an employee earns at least the city’s monthly threshold for work performed in Denver, both pieces kick in for that month. It’s not about where someone lives—it’s about where the work happens. If you meet the threshold doing work in Denver, the tax applies. If you don’t, it doesn’t. Simple idea, but easy to mix up when people split time across locations or have multiple jobs.
Monthly threshold and what it means
In Denver, the “monthly threshold” is $500 of gross pay earned for work performed inside Denver during a single calendar month. If an employee hits $500+ in that month from Denver work, the Occupational Privilege Tax applies for that month: $5.75 employee OPT (withheld) and $4.00 employer OPT (paid by the business). It’s based on where the work is performed, not where the employee lives.
Good to know (common scenarios):
- Hitting $500 on any day within the month triggers OPT for the entire month (not prorated).
- If someone has two Denver employers, the employee portion is generally paid once (coordinate to avoid double-withholding—use the city’s form).
- Owners/partners doing business in Denver may still owe the Business OPT even if not on payroll.
- Neighboring cities have different thresholds/amounts—don’t mix rules (Denver’s threshold is $500).
Who owes Denver OPT (quick checklist)
Use this quick list to see if OPT applies this month:
- Do you perform services in Denver this month (even part-time or hybrid)?
- Did you earn at least the monthly threshold in Denver this month?
- Are you a Denver employer with at least one worker who hits the threshold?
- Do any employees work for multiple Denver employers? (They generally pay once—coordination is needed.)
- Do you have owners/partners doing business in Denver? (Business OPT may still apply.)
- Did a worker start or end mid-month and still meet the threshold from Denver work?
- Are you tracking where work is performed (not just where the employee lives)?
If you said “yes” to any of these, you likely have an OPT filing to handle for that month. We’ll say it again, that knowing “What is the Occupational Privilege Tax in Denver?” and how it’s triggered can save you time, stress, and money.
Before we jump into setup, let’s get your documents in order so payroll can withhold and file correctly the first time.
What to give your payroll provider (or bookkeeper)
- Your Denver worksite address(es) and any remote/hybrid patterns that include Denver time
- A monthly list of employees who hit the threshold in Denver
- Notes on multi-employer situations (to avoid double withholding)
- Start/stop dates for new hires and exits in Denver
- Any refund/adjustment requests from past months
- Your Denver tax account details (registration/eBiz info)
- A point of contact for OPT questions each month
If this already feels like a lot, you’re not alone. This is exactly where we step in and make it easy.
How we help with OPT (so it’s simple and stress-free)
At The Denver Tax Group, we handle all your accounting needs to make sure your business is successful and compliant. We offer other services to prepare you for years ahead, and making sure you’re on track with the Occupational Privilege Tax in Denver is just one of them. Here is more about what we do to help you specifically in this area.
- Set up your Denver tax account and payroll codes the right way
- Map work locations and build a clean process to track who hits the threshold
- Create a monthly checklist so filings don’t get skipped
- Train your team on what counts as “worked in Denver” (and what doesn’t)
- Coordinate multi-employer cases so employees aren’t over-withheld
- Review pay stubs and reports to catch issues before they turn into notices
- Handle notices and fix past errors with amended filings or credits
- Document everything so you’re audit-ready if the city asks questions
Denver Tax Group can answer all your accounting questions, like “What is the Occupational Privilege Tax in Denver?”
When you understand what is the Occupational Privilege Tax in Denver, you can build a smooth monthly routine and stop worrying about surprise notices. The rule of thumb: it’s based on work performed in Denver and the monthly earnings threshold. Get those two pieces right, and the rest falls into place. If you want us to set it up, monitor it, and file it for you, we’re here to help. And if you’re writing a guide for your team, feel free to reuse this post—because sometimes the clearest answer to “What is the Occupational Privilege Tax in Denver?” is the one that keeps you out of trouble and on schedule. Contact us today to get started.
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“Chad and his team at Denver Tax Group are nothing short of exceptional! Their professionalism and expertise in all things tax-related have been invaluable to our new business. Chad has played a pivotal role in getting us off the ground by expertly managing our payroll services and taxes. The entire staff is consistently polite, attentive, and ensures that our needs are always met. I highly recommend Denver Tax Group for anyone seeking top-notch tax and business services—they are truly the best in the business!” -Danielle
Denver Tax Group is your trusted Denver tax accountant
Denver Tax Group is located in Aurora, Colorado, and focuses on our client’s long-term growth while providing a wide array of services for your taxes. We believe a strong foundation is the key to financial freedom. Clear communication between the client and the tax professional, accurate preparation that we stand behind, and tax advice that will place you and your family on track for a strong financial future! We offer different services to prepare you for the years ahead. Contact us today to get started on our bookkeeping and payroll services so you can concentrate on making your small business a lot bigger. Call now to schedule your appointment: 303-333-0363.
