Income tax withholding
| Imposes wage income tax | Yes |
|---|---|
| Rate structure | Flat 3.07% |
| Withholding certificate | None (federal Form W-4 for recordkeeping) Pennsylvania has no state withholding allowance certificate -- employers withhold at the flat 3.07% rate with no allowances or exemptions |
| Accepts federal Form W-4 | Yes |
| Convenience-of-the-employer rule | Yes Remote days worked outside Pennsylvania for a Pennsylvania employer can still be sourced to Pennsylvania unless the arrangement is an employer necessity. |
| Nonresident withholding threshold | From the first dollar Withholding required from the first dollar of Pennsylvania-source compensation. Pennsylvania applies a LIMITED convenience-of-the-employer test: a nonresident who works remotely for a Pennsylvania employer is sourced to Pennsylvania where the remote work is for the employee's own convenience rather than the employer's necessity. Residents of reciprocal states (notably New Jersey) are exempt under the reciprocal agreement. |
| Local income taxes | Yes Roughly 2,470 municipalities and 469 school districts levy an Earned Income Tax (EIT) and/or a Local Services Tax (LST), withheld by employers under Act 32. Philadelphia's Wage Tax is separate from the Act 32 system. CRITICAL: the PA/NJ reciprocal agreement does NOT cover the Philadelphia Wage Tax -- New Jersey residents working in Philadelphia still owe it. |
Reciprocity
Pennsylvania exempts residents of 6 states from Pennsylvania withholding, provided the employee files REV-419 with the employer.
Confirmed on the face of Form REV-419 (EX) 03-24: Indiana, Maryland, New Jersey, Ohio, Virginia and West Virginia. The NJ agreement is live. Covers Pennsylvania PERSONAL INCOME TAX only -- it does NOT exempt the employee from Pennsylvania LOCAL EIT or the Philadelphia Wage Tax.
States that exempt Pennsylvania residents
A Pennsylvania resident working in these states files that state's certificate and is taxed only by Pennsylvania.
Unemployment insurance and paid leave
| Taxable wage base 2026 | $10,000 2025 base was $10,000. |
|---|---|
| New employer rate | 3.822% Rate range shown is the total 2026 experience-based rate including the 9.2% surcharge and 0.60% additional contributions tax (US DOL reports the underlying range as 0.75%-8.95%). New construction employers pay 10.5924%. Employees pay a 0.07% UC withholding on all gross wages with no cap. |
| Experience rate range | 1.419% – 10.3734% |
| Experience-rating method | benefit ratio |
| Employee UI contribution | Yes Pennsylvania withholds employee UC contributions of 0.07% (70 cents per $1,000) on ALL gross wages - there is no employee wage cap, unlike the $10,000 employer taxable wage base. |
| Paid family / medical leave | No |
Employer registration
- Tax agency
- Pennsylvania Department of Revenue
- UI agency
- Pennsylvania Department of Labor and Industry, Office of UC Tax Services
Sources
pa.gov · pa.gov · nj.gov · oui.doleta.gov · oui.doleta.gov · oui.doleta.gov · pa.gov