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Taxes
Pennsylvania Payroll Taxes 2026: Complete Overview for Employers
PA flat 3.07% state income tax, SUI via PA UC system, local earned income tax, and Local Services Tax — all explained.
Practical guides on PA payroll taxes, UC registration, local earned income tax, SUI, and wage laws — written for small business owners, not accountants.
Pennsylvania has thousands of municipalities, each with its own Earned Income Tax rate. Employers must withhold based on work location — the #1 source of PA payroll errors.
PA has a flat 3.07% state income tax — simple on the surface. But add local EIT, Local Services Tax, and UC contributions, and the compliance picture gets complicated fast.
Semi-monthly pay required, strict deduction rules, and the Wage Payment and Collection Law lets employees sue for unpaid wages plus liquidated damages.
PA flat 3.07% state income tax, SUI via PA UC system, local earned income tax, and Local Services Tax — all explained.
Get your EIN, register with PA UC, set up withholding, new hire reporting — the complete checklist.
Every PA municipality has its own EIT rate. Withhold based on work location, not residence. The biggest compliance trap in PA payroll.
PA minimum wage $7.25/hr (same as federal). Philadelphia $15/hr. Tipped minimum $2.83/hr. No state increase since 2009.
IRS classification rules, Pennsylvania-specific considerations, misclassification penalties, and when each classification applies.
Gusto vs Paychex vs QuickBooks vs ADP — detailed comparison for Pennsylvania small businesses with local tax support.