Quick Answer
Denver's OPT is a $5.75 monthly tax ($69 annually) paid by employees who work in Denver, regardless of where they live. It funds city services and appears as a flat deduction on your paycheck, not a percentage of income.
Best Answer
Sarah Chen, Payroll Tax Analyst
Workers whose employers automatically deduct Denver OPT from their paychecks
What is the Denver Occupational Privilege Tax?
The Denver Occupational Privilege Tax (OPT) is a monthly flat fee of $5.75 that all employees working within Denver city limits must pay, regardless of where they live. Unlike income taxes that are calculated as a percentage of your earnings, the OPT is a fixed amount that appears as a line item deduction on your paycheck.
This tax generates approximately $25 million annually for Denver's general fund, helping pay for city services like parks, libraries, police, fire department, and infrastructure maintenance.
How the OPT appears on your paycheck
Most employers automatically deduct the OPT from employee paychecks. Here's how it typically looks:
Example: $60,000 salary with Denver OPT
Let's say you earn $60,000 annually and work in Denver:
The OPT represents just 0.12% of your gross income in this example — a relatively small but noticeable deduction.
Who must pay the Denver OPT?
Required to pay:
Exempt from OPT:
Key factors that affect your OPT
What you should do
Check your pay stub to confirm the OPT deduction appears correctly as $5.75 per month. If you believe you're paying incorrectly (perhaps you don't actually work in Denver), contact your payroll department. Use our [paycheck calculator](https://explainmypaycheck.com/tools/paycheck-calculator) to verify all your deductions are accurate.
Key takeaway: Denver's OPT is a flat $5.75 monthly fee for all employees working in Denver, costing $69 annually regardless of your salary level.
*Sources: [Denver Department of Finance](https://www.denvergov.org/Government/Departments-and-Agencies/Department-of-Finance), [IRS Publication 15](https://www.irs.gov/pub/irs-pdf/p15.pdf)*
Key Takeaway: Denver's OPT is a flat $5.75 monthly tax that costs $69 annually, paid by all employees working in Denver regardless of where they live.
Denver OPT impact by salary level
| Annual Salary | Monthly OPT | OPT as % of Salary | Annual OPT Cost |
|---|---|---|---|
| $40,000 | $5.75 | 0.17% | $69 |
| $60,000 | $5.75 | 0.12% | $69 |
| $80,000 | $5.75 | 0.09% | $69 |
| $100,000 | $5.75 | 0.07% | $69 |
More Perspectives
Sarah Chen, Payroll Tax Analyst
Workers who recently relocated to or from the Denver area and need to understand how OPT affects them
How Denver OPT affects recent movers
If you recently moved to or from the Denver area, understanding the OPT is crucial because it's based on where you work, not where you live.
Moved TO Denver area:
Moved AWAY from Denver:
Common moving scenarios
Scenario 1: You moved from Kansas City to Denver and got a job downtown. You'll now pay Colorado state income tax (4.4% flat rate) PLUS the $5.75 monthly Denver OPT.
Scenario 2: You moved from Denver to Colorado Springs but kept your Denver office job. If you still physically work in Denver (even hybrid), you likely still owe the OPT.
Scenario 3: You moved from Thornton to downtown Denver. Your state taxes don't change, but you'll start paying the additional $69 annual OPT.
What to watch for when moving
Notify your payroll department immediately about address changes. They need to update withholding for state taxes and local taxes like the OPT. Don't assume systems will automatically adjust.
Key takeaway: When moving to/from Denver, your OPT obligation depends on your work location, not your home address — update payroll immediately to avoid over- or under-payment.
Key Takeaway: When moving to/from Denver, your OPT obligation depends on your work location, not your home address — update payroll immediately to avoid over- or under-payment.
Sarah Chen, Payroll Tax Analyst
Employees who work remotely but may have Denver-based employers
Denver OPT for remote workers
Remote work has complicated the Denver OPT because the tax applies to where you physically perform work, not just where your employer is based.
If you work remotely outside Denver:
You likely don't owe Denver OPT, even if your employer is Denver-based. However, some employers may continue deducting it by default. Contact payroll to clarify your specific situation.
If you're hybrid (some days in Denver office):
You may still owe the full monthly OPT. Denver doesn't prorate the tax for partial work — it's typically all or nothing based on whether you work in the city at all during the month.
If your employer hasn't updated their systems:
Many Denver-based companies still automatically deduct OPT from all employees. If you're fully remote outside Denver, you may be overpaying and eligible for a refund.
What remote workers should do
Review your pay stub carefully. If you see Denver OPT deductions but work entirely outside Denver city limits, contact your payroll department immediately to stop future deductions and potentially file for refunds of past overpayments.
Key takeaway: Remote workers outside Denver shouldn't pay OPT, but many employers haven't updated their systems — check your pay stub and contact payroll if needed.
Key Takeaway: Remote workers outside Denver shouldn't pay OPT, but many employers haven't updated their systems — check your pay stub and contact payroll if needed.
Sources
- Denver Department of Finance — Official Denver tax information and OPT guidelines
- IRS Publication 15 — Employer's Tax Guide for payroll tax requirements
Reviewed by Sarah Chen, Payroll Tax Analyst on February 28, 2026
This content is for educational purposes only and is not a substitute for professional tax advice. Consult a qualified tax professional for advice specific to your situation.