Pennsylvania State Payroll Tax Requirements for Employers

Pennsylvania employers must withhold state income tax and any applicable local income taxes from employee paychecks, withhold employee unemployment tax, and pay employer unemployment tax. Quarterly returns are required.

What are the state payroll tax obligations?

Pennsylvania requires employers to withhold state income and applicable local income taxes from employee paychecks, in addition to employee-withheld and employer-paid unemployment taxes.

Reciprocity: Pennsylvania has reciprocal agreements with Indiana, Maryland, New Jersey, Ohio, Virginia and West Virginia.

Local taxes: There are local service Pennsylvania income taxes and potentially a city tax, depending on location.

How do I register as an employer?

1. Register with the PA Department of Revenue for employer withholding income tax.
2. Register with the PA Department of Labor and Industry for unemployment tax.

What are the payroll tax filing requirements?

A list of municipal statistics is available for identifying local jurisdiction requirements.

Anything else I need to know?

Important: In Pennsylvania, if the amount to be remitted when filing is $1,000 or more, the payment must be made electronically.

Where can I find more information?

• Employer withholding tax: Pennsylvania's Department of Revenue at www.revenue.state.pa.us
• Unemployment taxes: Pennsylvania's Department of Labor and Industry at www.dli.state.pa.us

Frequently asked questions

What payroll taxes must Pennsylvania employers withhold?

Pennsylvania requires employers to withhold state income tax and any applicable local income taxes from employee paychecks, in addition to employee-withheld and employer-paid unemployment taxes. Local obligations can include Pennsylvania local services taxes and, depending on the work location, a city tax.

Where do I register as an employer in Pennsylvania?

Register with the PA Department of Revenue for employer withholding income tax, and with the PA Department of Labor and Industry for unemployment tax.

Which payroll tax forms does Pennsylvania require?

Employers file the Pennsylvania Quarterly W/H Return on the PA W-3 form to report state income tax withheld from wages, and the Pennsylvania Quarterly Contribution on the PA UC-2 form for both employee-withheld and employer-paid unemployment taxes. Applicable Local Services Tax (LST) filings are also due based on the local jurisdiction's requirements.

When is the Pennsylvania quarterly withholding return due?

The PA W-3 quarterly withholding return is filed by the end of April, July, October and January when payroll is run on a monthly or semi-monthly schedule.

Does Pennsylvania require electronic payment of payroll taxes?

Yes, above a threshold. If the amount to be remitted when filing is $1,000 or more, the payment must be made electronically.