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Payroll Tax in Pennsylvania | State & Native Taxes Overview

Payroll tax in Pennsylvania is notoriously troublesome, complicated, and overwhelming for brand spanking new and veteran employers alike. And with regards to payroll, you in all probability don’t wish to waste time making preventable payroll errors.

To assist simplify PA employment tax, we’ve put collectively the next article to evaluation your employer obligations. And, we’ve supplied loads of assets you need to use to get extra info. 

Patriot’s Full Service Payroll has Pennsylvania employers coated.

Bored with payroll consuming up your time? Get pleasure from correct tax calculations, tax deposits, and filings with Patriot Software program’s Full Service Payroll.

Federal employment tax overview 

Earlier than we get into Pennsylvania payroll taxes, let’s go over employment taxes on the federal degree. 

No matter what state you do enterprise in or have workers in, you’re chargeable for withholding the next federal taxes from worker wages:

  • Federal revenue tax 
  • Social Safety tax (employers should additionally contribute an identical quantity)
  • Medicare tax (employers should additionally contribute an identical quantity)

However as you already know, federal taxes aren’t the one taxes you withhold from worker paychecks. Most (however not all) states even have state revenue taxes, and plenty of have native revenue taxes. 

Pennsylvania is a state with each state and native revenue taxes. 

Payroll tax in Pennsylvania 

Do you know that Pennsylvania is dwelling to greater than a million small companies and a couple of.5 million workers? And with so many workers working within the state comes many employers working payroll. 

Once more, Pennsylvania has a state revenue tax employers should withhold from worker wages. And, the state has an area earned revenue tax (EIT) you’re chargeable for, together with an area providers tax (LST) you could be chargeable for. The PA payroll tax price for these native taxes varies by location. 

We’ll unravel the state PA payroll tax and native taxes beneath. 

Payroll tax in PA: Pennsylvania has state and local income taxes employers must calculate and withhold from employee wages.

Pennsylvania state revenue tax

State revenue tax (SIT) is a tax workers pay on their wages. As an employer, you’re chargeable for calculating and withholding the tax out of your workers’ taxable wages. After withholding the tax, you will need to remit it to the the Pennsylvania Division of Income

You need to withhold state revenue tax from an worker’s wages in the event that they’re a:

  • Resident worker who performs providers inside or outdoors Pennsylvania
  • Nonresident worker who performs providers in Pennsylvania 

So, what’s the PA payroll tax price for state revenue tax withholding? The PA state employment tax price is 3.07%


Earlier than you start working payroll for workers, register your small business with the state to acquire a state revenue tax account. 

You may register on-line by way of the PA On-line Enterprise Entity Registration (PA-100).

Tax remittance due dates 

How regularly it is advisable remit worker tax withholdings depends upon the quantity. Take a look at the next remittance schedule to search out your due dates:

Deposit Frequency Due Date Tax Withholding Quantity
Quarterly  The final day of April, July, October, and January Use this frequency in case your complete withholding is beneath $300 per quarter
Month-to-month fifteenth day of the next month Use this frequency in case your complete withholding is $300 – $999 per quarter
Semi-monthly Inside 3 banking days of the shut of the semi-monthly interval Use this frequency in case your complete withholding is $1,000 – $4,999.99 per quarter
Semi-weekly For those who pay workers on a Wednesday, Thursday, or Friday: Wednesday following the pay date

For those who pay workers on a Saturday, Sunday, Monday, or Tuesday: Friday following the pay date

Use this frequency in case your complete withholding is $5,000 or better per quarter ($20,000 per yr)

How one can pay PA tax

You may file tax returns and pay withheld revenue tax utilizing one of many following strategies:

  1. On-line utilizing e-TIDES
  2. By cellphone utilizing TeleFile
  3. Third-party software program (e.g., Patriot Software program’s payroll)

For extra details about Pennsylvania state revenue tax withholding, try the state’s web site.

Pennsylvania native revenue taxes

The Pennsylvania Division of Neighborhood and Financial Growth handles native revenue taxes. Employers with worksites in Pennsylvania are chargeable for withholding and remitting Pennsylvania native revenue taxes. Worksites embrace factories, warehouses, branches, workplaces, and residences of distant workers. 

Once more, PA has two native taxes:

  • Earned Revenue Tax (EIT): All workers working in Pennsylvania should pay an area earned revenue tax. 
  • Native Companies Tax (LST): This native tax solely applies to sure places.

However earlier than we get into EIT and LST, let’s have a look at your basic employer obligations concerning native revenue taxes.

Pennsylvania advises employers to take the next steps to find out their native revenue tax withholding necessities:

  1. Search for PSD (political subdivision) codes and tax charges: The PSD is a 6-digit quantity that identifies location and helps decide your worker’s native tax price. Use Pennsylvania’s Deal with Search Utility to lookup PSD codes and EIT and LST charges. Make sure you save the report in your data. Use this report info that will help you full types within the subsequent step.
  2. Full types: 
    1. Fill out the Residency Certification Kind for every worker. Save a duplicate of every kind in your data. 
    2. Register your small business on-line with the right native company or utilizing the Employer Registration for Native Earned Revenue Tax Withholding kind to acquire your native tax ID quantity. 

Earned revenue tax

As a Pennsylvania employer, you will need to use every worker’s accomplished Residency Certification Kind to find out their EIT price. The way you do that depends upon whether or not the worker:

  • Lives and works in PA: Examine the “Complete Resident EIT Charge” (the municipality the place the worker lives) to the “Work Location Non-Resident EIT Charge” (the place the worker works). Withhold the upper of the 2. 
  • Works in PA however lives outdoors of PA: Out-of-state resident workers are topic to the “Work Location Non-Resident EIT Charge.”

You need to file and remit withheld taxes inside 30 days of the tip of every calendar quarter. Don’t observe this deadline you probably have a number of worksites and have elected to remit to a single tax collector (you will need to file and remit month-to-month). 

Not a Pennsylvania employer? You probably have an worker who lives in PA however works in one other state, you aren’t chargeable for finishing the Residency Certification Kind. You may, nonetheless, withhold the worker’s “Complete Resident EIT Charge” as a courtesy. For those who resolve to not, let the worker know (they’ll have to deal with this on their very own).

For extra info on earned revenue tax, try the state’s web site.

Native providers tax

You probably have worksites inside an LST taxing jurisdiction, you will need to deduct the tax from workers on the web site of employment. 

Use the Official Tax Register to find out if the tax is listed in your space. Don’t see your municipality’s and/or college district’s tax charges? You aren’t required to withhold the LST.

You need to file and remit withheld taxes inside 30 days of the tip of every calendar quarter. You probably have each a municipal and faculty tax, and if the mixed tax price exceeds $10, withhold it collectively and remit to the municipality. 

Not all workers are topic to LST withholding. Usually, workers whose complete earned revenue is decrease than $12,000 are exempt if the LST exceeds $10. Don’t withhold native providers tax for the yr from an worker’s wages if they provide you an upfront exemption kind. Nonetheless, you will need to restart withholding the tax in case your locality tells you to, the worker tells you they’re not eligible, or in the event you pay the worker greater than $12,000 for the yr. 

For extra info on native providers tax, try the state’s web site

Don’t let handbook payroll tax calculations sluggish you down. Patriot’s payroll software program ensures correct tax calculations. Need us to deal with your federal, state, and native tax filings and remittance, too? Join our Full Service Payroll. Get your free trial of both product at this time! 

This isn’t meant as authorized recommendation; for extra info, please click on right here.



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