Pennsylvania Employer Requirements: Withholding, UC Tax, Local EIT and LST, New Hire Reporting

Hiring your first employee in Pennsylvania adds a set of filing duties at once. Pennsylvania payroll taxes and related rules cover state income tax withholding, unemployment compensation (UC) tax, local earned income tax (EIT) and local services tax (LST), new hire reporting, child labor permits, and workers' compensation. Each one comes from a different agency or level of government, and each has its own deadline. This guide covers what you owe, the figures to plan around, and where to confirm them.

Some setup facts come up alongside payroll. Pennsylvania has no state general business license and no county business licenses. Pennsylvania uses a registered office rather than a registered agent, and LLCs have no publication requirement. Employer registrations are a separate matter, and they apply as soon as you have employees.

Step 1: Register your state tax accounts in myPATH

Pennsylvania retired the PA-100 registration form in 2022. Employers now register through myPATH, the Commonwealth's online system for tax accounts. Register your PA employer withholding account before your first payroll, then confirm the filing schedule assigned to your account. Revenue's registration guidance is at Register My Business for Taxes, and the agency home page is Pennsylvania Department of Revenue.

Your unemployment compensation account is a separate registration with the Department of Labor and Industry (L&I), covered in Step 3.

Step 2: PA withholding tax on employee wages

Pennsylvania levies a flat personal income tax, and the rate used for withholding is 3.07%. Withhold 3.07% of each employee's taxable wages on every payroll. A $1,000 paycheck has $30.70 withheld for state income tax. The rate does not change with income level, so the same calculation applies to every employee on your payroll.

Pennsylvania withholding is one part of your PA payroll taxes. Federal income tax withholding and Social Security and Medicare (FICA) taxes are federal obligations on their own schedules, and this guide does not cover them. Set up your payroll software or service so all three run from the same pay cycle, and so no deposit is missed.

Step 3: Pennsylvania unemployment tax (PA UC tax)

Pennsylvania unemployment tax funds the state's unemployment benefits. L&I administers it. Employers pay the employer share, and employees contribute a smaller share through withholding. Register your UC account with L&I before your first payroll and confirm the rate assigned to your account. The figures for a new employer are:

• New employer rate: 3.822% on the first $10,000 of each employee's wages.
• New construction employer rate: 10.5924% on the first $10,000 of each employee's wages.
• Employee withholding: 0.07% withheld from wages. Confirm with L&I how this applies to your payroll.

At the new employer rate, one employee paid $10,000 in wages produces $382.20 in employer UC tax. A new construction employer paying the same wages would owe $1,059.24. Wages above $10,000 per employee fall outside this wage base. Your account rate may differ from the new employer rate, so confirm the figure assigned to your business with L&I before you set your payroll budget.

Step 4: Local EIT withholding

Local earned income tax is levied by municipalities and school districts, not by the state, so the rate varies by location. This guide does not list local rates. Withhold local EIT using each worker's PSD (political subdivision) code, which identifies the local taxing jurisdiction for that employee. Remit the withheld amounts to the county TCD collector, meaning the Tax Collection District collector that serves the area.

Collect the PSD code during onboarding so the first paycheck is right. Ask the local collector how to look up PSD codes, which collector serves each work location, and when remittances are due. Keep each collector's contact details with your payroll records.

Step 5: Local services tax (LST)

LST is a separate local levy from EIT. Withhold up to $52 from each affected employee and remit it to the local tax collector within 30 days after each quarter. The amount is set locally and can differ by work location, so confirm the figure for each location with the local collector. Do not assume one amount applies to every employee.

Step 6: Pennsylvania new hire reporting

Report every new hire to the Commonwealth's new hire directory within 20 days of the hire date, as required by 23 Pa.C.S. 4392. Count the 20 days from the hire date, not from the first paycheck. PA new hire reporting is a separate duty from payroll tax, so it needs its own line on your onboarding checklist.

Confirm the reporting method and the required data fields before your first hire. Build the report into onboarding so no new hire is missed, and keep a record of the date each report was sent.

Step 7: Pennsylvania child labor laws

If you employ anyone under 18, review Pennsylvania child labor laws before that person's first shift. Minors need work permits, and you should keep a copy of each permit in the employee file. PA child labor laws also restrict the hours and types of work open to minors, and those restrictions depend on age. Confirm with L&I which minors need a permit, who issues it, and the hour and job restrictions for each age group.

Step 8: Workers' compensation

Pennsylvania requires workers' compensation coverage starting with your first employee. Put coverage in place before that person starts work. This guide does not list premiums or insurers, because premiums depend on your industry and payroll. Confirm the coverage requirements with L&I and get quotes before the hire date.

Payroll requirements at a glance

Requirement	Agency	Key figure	Timing
State withholding	Department of Revenue (myPATH)	3.07%	Confirm filing schedule after registration
UC tax (employer)	L&I	3.822% new employer; 10.5924% new construction employer; first $10,000 per employee	Confirm rate with L&I
UC employee withholding	L&I	0.07%	Confirm application with L&I
Local EIT	County TCD collector	Set by each municipality and school district	Use each worker's PSD code
LST	Local tax collector	Up to $52	Remit within 30 days after each quarter
New hire reporting	Commonwealth new hire directory	Not applicable	Within 20 days of hire (23 Pa.C.S. 4392)
Child labor	L&I	Work permits for minors	Confirm with L&I before a minor starts
Workers' compensation	L&I	Coverage required from first employee	In place before first employee starts

First-payroll checklist

1. Register the state withholding account in myPATH.
2. Register the UC account with L&I and confirm the rate assigned to it.
3. Collect each new employee's PSD code and confirm the local collector for each work location.
4. Confirm the LST amount for each work location with the local collector.
5. Put workers' compensation coverage in place before the first employee starts.
6. Collect the work permit for any minor before the first shift.
7. Report each new hire within 20 days of the hire date.

Common mistakes to avoid

• Counting the new hire deadline from the first paycheck instead of the hire date.
• Applying one local EIT or LST figure to employees who work in different locations.
• Assuming the new employer UC rate applies to your account without confirming it with L&I.
• Putting a minor to work before the work permit is in the file.

Important notes

This guide is informational content, not legal or tax advice. Pennsylvania payroll rules, rates and deadlines can change, and several figures above depend on your industry, work locations and account history. Confirm current requirements on the agency pages: the Pennsylvania Department of Revenue for withholding and tax accounts, and L&I for unemployment compensation, child labor and workers' compensation. For complex payroll setups, employees in more than one state, or questions about worker classification, consult a qualified CPA, payroll provider or attorney.