If you are passing a large variable by value (which is the default for everything except objects in PHP5+), then yes, you can take a performance hit.
For example, if the user submits a large amount of POST data, if you were to pass that to a function normally (aka pass by value), the whole array would have to be copied, which would affect performance. However, unless you're on a very large-scale site, you probably won't notice the hit.
Pass by reference is possible in PHP, but certainly not the default (unless it's an object): you need to add an & before the variable to make it pass by reference, otherwise it's just by value (and copies it). As of PHP5, objects are passed by reference automatically, but before PHP5 you need to explicitly pass by reference (ie add the &)