Pennsylvania Wage and Payroll Tax Facts

February 02, 2024

Having to comply with unique state taxes and wage laws can make processing payroll doubly daunting. Here’s everything you need to know about these rates and laws for the state of Pennsylvania.

While the state of Pennsylvania uses the same minimum wage rate required by the federal government, the city of Philadelphia also has a local Paid Sick Leave program guaranteeing time off for local employees who work for a local manager.  
When it comes to processing payroll, Pennsylvania-based organizations must handle the following taxes in addition to those required by the federal government:

The below information was last updated January 31, 2024. It is not intended as legal or tax advice.

Pennsylvania Minimum Wage Rates

Wage Type

Pennsylvania Rates

Federal Rates

Minimum Wage



Tipped Minimum Wage



Actual Tip Credit



Pennsylvania State Income Tax (SIT) Rates

Pennsylvania has a flat income tax rate of 3.07%, meaning all residents pay the same amount regardless of their income levels.

Additional Pennsylvania SIT Details

Supplemental Withholding Computation


Valid Filing Statuses

  • S = Single, Married; filing separately
  • M = Married; filing jointly



Form W-4

N/A (allowances aren't permitted as employers withhold a flat rate on all gross wages)

Reconciliation Frequency


Pennsylvania State Unemployment Insurance (SUI) Rates

SUI provides unemployment benefits to eligible workers who are unemployed through no fault of their own (as determined by state law) and meet the state’s eligibility requirements.

Pennsylvania SUI Tax Details

Taxable Wage Base


Employee Subject to Tax

Yes (0.07% of their total gross wages)

Rates for Experienced Employers

1.419% - 10.3734%

Rates for New Employers


Effective Period

Calendar Year

Voluntary Contributions Allowed

Yes; must be made within 120 days after the start of the year and 30 days after the mailing of employer rates

Pennsylvania State Disability Insurance (SDI) Rates

SDI benefits are funded by employees through mandatory payroll deductions from each paycheck. Pennsylvania, however, doesn't require employers to collect an SDI tax.

Miscellaneous Pennsylvania Tax Information

Reciprocal Agreement(s)

Reciprocal agreements are when workers who live and work in different states are only required to pay taxes to the state where they live. Pennsylvania currently has reciprocal agreements with the following states:

  • Indiana
  • Maryland
  • New Jersey
  • Ohio
  • Virginia
  • West Virginia

Residents from these states who work in Pennsylvania will need to submit a completed REV-419 form to allow their employer to withhold taxes for their state of residence.

Paid Sick Leave (PSL) Taxes

The state of Pennsylvania doesn't require employers to collect PSL taxes, nor does the state have a program providing such leave to employees. The city of Philadelphia, however, does have a program providing such leave to eligible employees:

Philadelphia PSL Details

Covered Employees Employees who work in Philadelphia as long as their employer has a physical location within the city and they perform work at that location or another location within the city. Employees must work 40 hours within the city to be eligible.
Accrual Method(s) 1 hour for every 40 hours worked
Carryover Maximum 40 hours
Annual Accrual Maximum 40 hours*
Frontloading Allowed Yes
FAQs PSL Law One-Pager

*Unless the employer opts to give them more.

Paid Family and Medical Leave (PFML) Taxes

The state of Pennsylvania doesn't require employers to collect PFML taxes, nor does the state have a program providing such leave to employees.

Local Earned Income Tax (EIT) Rates

Employers in Pennsylvania must withhold and remit a local EIT to the state on each employee’s behalf. The rates for this tax vary based on the employer’s location and the employee’s residence, which are each identified by a Political Subdivision (PSD) code. The higher of the two rates (the resident PSD’s rate or the work PSD’s rate) is what’s withheld from the employee’s wages. The work PSD also determines which state-based tax collector receives the withheld funds and is always used to report wages. Meanwhile, the resident PSD is used on quarterly tax returns so the state-based collector knows which local township or municipality should receive the funds.

Local Services Tax (LST) Rates

Some local townships or municipalities in Pennsylvania also require employers to withhold and remit an LST to the state on some employees' behalf. Like local EIT rates, LST rates vary based on where the employee works but are solely based on that work location. Not all local townships or municipalities require an LST, but those that do typically will require one of three annual amounts:

  • If the LST’s annual amount is $10.00, the tax will be withheld from the employee’s first paycheck of the year.
  • If the LST’s annual amount is $52.00, a $1.00 weekly tax will be applied throughout the year and adjusted based on the employee’s pay frequency.
  • If the LST’s annual amount is $156.00, a $3.00 weekly tax will be applied throughout the year and adjusted based on the employee’s pay frequency.

Low-income employees who make less than $12,000 annually are exempt from LSTs. 

Local Taxes

The city of Philadelphia has its own income tax (the Philadelphia Wage Tax) in lieu of a state EIT for those who work and live within its city limits. The rates for this tax are:

  • 3.75% for city residents
  • 3.44% for nonresident employees

Note, the city also requires employers to report a company’s entity type classification information on its quarterly returns: 

  • TST - Trust
  • IND - Individual/Sole Proprietor
  • CRP - Corporation
  • PART - Partnership
  • EST - Estate
  • GOVT - Government
  • NONP - Nonprofit
  • DIS - Disregarded Entity

Pennsylvania Employer Registration

The agencies below can help with your state-based employer registration, including best practices, account numbers, and unemployment information. Contact the Department of Revenue for withholding tax topics and the Department of Labor & Industry for unemployment tax topics.

Registration Details

Department of Revenue

Department of Labor & Industry


(717) 787-1064 (866) 403-6163

Online Registration

myPATH Tax Hub

Registration Instructions

Online registration is available, and your account number will be issued during the registration process.

Employer Self-Service Login

myPATH Tax Hub UCMS Login Page

As part of their registration, Pennsylvania-based employers are also required to make any deposits using their Employer Assigned Filing Frequency. The deposit frequency is based on the amount of withholding by the employer, while the filing type is decided by the Department of Revenue based on a quarterly average of tax withheld. The agency will provide employers an annual notice of their frequency or changes to their frequency.

  • Semi-Weekly: Employers that can reasonably anticipate their employer withholdings will be $20,000 or more in a calendar year
  • Semi-Monthly: Employers with a quarterly average amount of $1,000.00 or greater
  • Monthly: Employers with a quarterly average amount of less than $1,000.00, but greater than or equal to $300.00
  • Quarterly: Employers with a quarterly average amount of less than $300.00

Note, all active employer withholding tax accounts must file quarterly reconciliation returns of income tax withheld.

Additional Pennsylvania Payroll Tax Resources


This information is provided as a courtesy and may be updated at any time. It is not intended as legal or tax guidance. If you have questions or concerns, we encourage you to seek the advice of a qualified CPA, tax attorney, or advisor.


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