States/Pennsylvania/Local Jurisdictions

Pennsylvania Local Payroll Taxes

Pennsylvania has over 2,500 municipalities with local earned income taxes (EIT). Philadelphia and Pittsburgh have the highest rates. Employers must withhold local taxes for employees working in these jurisdictions.

2,500+
Taxing Jurisdictions
3.75%
Highest Rate (Philly)
0.5%
Minimum Rate
2
Collection Systems

PA Local Tax Collection Systems

Keystone Collections Group

Collects for many municipalities and school districts in eastern and central PA.

keystonecollects.com

Berkheimer Tax Administrator

Major collector for western PA municipalities and school districts.

hab-inc.com

Major Cities with Local Wage Tax

Philadelphia

1.6M
3.75%
resident rate
Non-resident rate:3.44%

Reading

95K
3.6%
resident rate
Non-resident rate:1.3%

Scranton

77K
3.4%
resident rate
Non-resident rate:1%

Wilkes-Barre

44K
3.1%
resident rate
Non-resident rate:1%

Pittsburgh

303K
3%
resident rate
Non-resident rate:1%

Harrisburg

50K
2%
resident rate
Non-resident rate:1%

Allentown

126K
1.825%
resident rate
Non-resident rate:1%

Erie

95K
1.68%
resident rate
Non-resident rate:1%

York

45K
1.25%
resident rate
Non-resident rate:1%

Lancaster

64K
1.1%
resident rate
Non-resident rate:0.5%

Bethlehem

76K
1%
resident rate
Non-resident rate:1%

Employer Withholding Requirements

1.

Register with tax collector: Employers must register with the appropriate tax collection agency for each municipality where they have employees working.

2.

Withhold correct rate: Withhold at the higher of the work location rate or the employee's residence rate.

3.

Remit quarterly: Most jurisdictions require quarterly remittance. Philadelphia requires monthly for larger employers.

4.

Annual reconciliation: File annual reconciliation forms with employee W-2 information.

Important Notes

  • • PA local taxes are called "Earned Income Tax" (EIT) or "Local Services Tax" (LST)
  • • LST is a flat $52/year tax in many municipalities (separate from EIT)
  • • Philadelphia also has a Net Profits Tax (3.75%) and Business Income & Receipts Tax
  • • Remote work may affect which jurisdiction's tax applies
  • • School districts may also levy separate earned income taxes
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