Article
3 min read
Your Ultimate Guide to Pennsylvania Payroll
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Author
Jemima Owen-Jones
Published
August 01, 2023
Last Update
September 02, 2024
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Table of Contents
Paying unemployment insurance (UI) in Pennsylvania
Pennsylvania State unemployment insurance (SUI) tax rates
Withholding personal income tax from your Pennsylvania Employee
State withholding tax rates in Pennsylvania
Paying your Pennsylvania workers’ compensation
Workers' compensation tax rates in Pennsylvania
Payroll tax due dates in Pennsylvania
Submission process for payroll taxes in Pennsylvania
Withholding paid family leave from Pennsylvania employees
Pennsylvania employer responsibilities and compliance
Simplify US payroll tax compliance with Deel
Key takeaways
- Employers in Pennsylvania are responsible for paying various payroll taxes on behalf of employees, including unemployment insurance, also known as unemployment compensation.
- Personal income tax is another payroll tax to consider, calculated on the income of Pennsylvania employees.
- Workers’ compensation safeguards both employees and the employer against the repercussions of work-related injuries and illnesses.
As an employer in Pennsylvania, you are responsible for legally complying with proper payroll withholding regulations and requirements. To help you get started, this guide serves as an introduction to common payroll withholdings, such as unemployment insurance, personal income tax, and workers’ compensation.
Paying unemployment insurance (UI) in Pennsylvania
As an employer, you may be familiar with common federal tax withholdings such as Medicare and Social Security. However, other Pennsylvania state taxes must also be withheld from your employee’s payroll. One of these employer payroll taxes is unemployment insurance (UI), commonly referred to as unemployment compensation in Pennsylvania.
Unemployment insurance payroll withholding is a national program that provides financial assistance to eligible individuals who have lost their jobs involuntarily and are actively seeking new employment.
Unlike most other states, Pennsylvania allows you to withhold portions of your employee’s salary as contributions to unemployment compensation. Administered by the US Department of Labor, unemployment compensation is managed through an online portal.
More information on paying your unemployment insurance can be accessed from the Pennsylvania Office of Unemployment Compensation.
Pennsylvania State unemployment insurance (SUI) tax rates
Pennsylvania calculates unemployment compensation rates annually, based on factors such as the employer’s experience rating and the state’s Unemployment Compensation Trust Fund balance. Employers can access their specific tax rates and protest determinations via the Pennsylvania Office of Unemployment Compensation's online portal.
Experience rating | Minimum rate | Maximum rate |
---|---|---|
New Employer | 3.689% | 3.689% |
Lowest Rate | 1.290% | 1.290% |
Highest Rate | 9.933% | 9.933% |
Employers must ensure they withhold the correct amount from employee wages, contributing both employer and employee portions where applicable. Employers have the right to protest their rate determination within 30 days of receiving their notification.
Withholding personal income tax from your Pennsylvania Employee
Personal income tax is another employer payroll tax that is calculated on the income of Pennsylvania residents. Also known as individual or state income tax, personal income tax is deducted from an employee’s wages and withheld by the employer.
The employer is responsible for paying the withheld amount to the state, a process that can be completed through Pennsylvania’s online portal.
For more information on paying the withholding amount, the Pennsylvania Department of Revenue provides more information.
State withholding tax rates in Pennsylvania
The withholding tax rates in Pennsylvania depend on the employee's earnings and the payroll period. Below is a table illustrating the withholding rates for different payroll periods:
Payroll period | Tax rate | Wage range |
---|---|---|
Weekly | 3.07% | All wages |
Monthly | 3.07% | All wages |
Annually | 3.07% | All wages |
Employers can manage these tax payments using Pennsylvania’s e-TIDES online system, ensuring timely and accurate remittance. For more information on filing taxes online, visit the Pennsylvania e-TIDES.
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Paying your Pennsylvania workers’ compensation
On top of paying your Pennsylvania payroll taxes, you must also pay workers’ compensation, even if you only have one Pennsylvania employee.
Workers’ compensation is a form of insurance that provides wage replacement and medical benefits to employees who are injured or become ill on the job. The insurance is usually purchased from a qualified commercial carrier in the state. To assist, the Pennsylvania Department of Labor and Industry provides valuable information to help you find a qualified commercial carrier.
Note: It’s important to verify that your workers’ compensation insurance complies with the state’s regulations for workers’ compensation.
Workers' compensation tax rates in Pennsylvania
Workers' compensation in Pennsylvania for 2024 includes the following rates:
Compensation type | Maximum rate | Minimum rate |
---|---|---|
Temporary Disability | $1,081 | $305 |
Permanent Partial Disability | Varies | Varies |
Total Disability | $1,081 | $305 |
Death Benefits | $1,081 | - |
Understanding these details ensures that your business complies with Pennsylvania's payroll tax laws and effectively manages its payroll obligations.
Payroll tax due dates in Pennsylvania
Understanding and adhering to payroll tax due dates is critical to avoid penalties. Pennsylvania has specific deadlines for various tax filings:
Tax type | Frequency | Due date |
---|---|---|
Weekly Payroll | Weekly | 3 business days after payday |
Monthly Payroll | Monthly | 15th of the following month |
Quarterly Payroll | Quarterly | Last day of the month following the quarter |
Annual Reconciliation | Annually | Last day of February following the tax year |
Quarterly tax filings
Employers are typically required to file quarterly tax reports, with due dates falling at the end of the month following each quarter's end:
Quarter | Months | Due date |
---|---|---|
Q1 | January - March | April 30 |
Q2 | April - June | July 31 |
Q3 | July - September | October 31 |
Q4 | October - December | January 31 |
Annual reconciliation
An annual reconciliation of withheld taxes must be submitted by the end of February each year. For more information on filing deadlines, visit the Pennsylvania Department of Revenue - Filing Deadlines.
Submission process for payroll taxes in Pennsylvania
Employers must file payroll tax forms electronically using Pennsylvania’s e-TIDES system. The state mandates online filing for efficiency and accuracy. Employers should utilize forms such as PA-W3 (Annual Reconciliation Statement) and UC-2 (Employer’s Report for Unemployment Compensation).
The e-TIDES system facilitates various payroll tax filings, including registration, filing, and payment of taxes. Bulk e-filing is available for employers managing a large number of employees, ensuring a streamlined and efficient process. For more information, visit the Pennsylvania e-TIDES System.
Withholding paid family leave from Pennsylvania employees
While Pennsylvania does not currently have a state-mandated paid family leave program, employers may need to comply with federal FMLA requirements. Employers should also stay updated on any future state legislation that might introduce similar programs, as there is growing interest in establishing paid family leave benefits in many states.
Pennsylvania employer responsibilities and compliance
Employers in Pennsylvania must not only withhold and remit the correct taxes but also keep accurate records of all payroll transactions. This includes maintaining detailed employee wage and tax records for at least four years. Compliance with both state and federal regulations helps avoid audits and penalties.
FAQs
What is payroll tax?
Payroll tax includes federal, state, and local taxes withheld from employees' wages.
Who needs to file payroll taxes in Pennsylvania?
Any employer who pays wages to employees in Pennsylvania.
What forms are required for payroll tax filing?
Forms include PA-W3, UC-2, and other specific tax withholding forms based on employment type.
How often do employers need to file payroll taxes?
Generally, payroll taxes are filed quarterly, with some annual reconciliation.
Where can employers find the necessary payroll tax forms?
Forms are available on the Pennsylvania Department of Revenue website under the 'Employer Payroll Tax Forms' section.
Can payroll taxes be filed electronically?
Yes, through Pennsylvania’s e-TIDES online services.
What is the deadline for filing payroll taxes?
Deadlines vary, but quarterly reports are typically due by the end of the month following the quarter's end.
Who can employers contact for help with payroll taxes?
The Pennsylvania Department of Revenue.
Simplify US payroll tax compliance with Deel
While this guide provides essential information on Pennsylvania payroll taxes, payroll compliance, and state requirements extend beyond what is covered above. To streamline the process and ensure full compliance, companies can turn to Deel.
Deel offers a comprehensive solution for managing US and international payroll, including payments, taxes, worker classification, and more. Speak with an expert today to see how you can streamline your US payroll processes and ensure compliance with state regulations.
Disclaimer: This article is provided for general informational purposes and should not be treated as legal or tax advice. Consult a professional before proceeding.
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About the author
Jemima is a nomadic writer, journalist, and digital marketer with a decade of experience crafting compelling B2B content for a global audience. She is a strong advocate for equal opportunities and is dedicated to shaping the future of work. At Deel, she specializes in thought-leadership content covering global mobility, cross-border compliance, and workplace culture topics.