Wage statement requirements
Pennsylvania regulations require a statement with every wage payment listing hours worked, rates paid, gross wages, allowances claimed as part of minimum wage if any, deductions, and net wages.
See details →PENNSYLVANIA PAYROLL RESOURCES · PA · REVIEWED 2026-10-03
Pennsylvania Payroll &
Pay Statement Guide
Review Pennsylvania wage-statement requirements, state and local withholding resources, unemployment-compensation guidance, and official payroll sources. Run payroll for a small team and get employee statements from every calculated run.
Statement with every wage paymentPennsylvania requires covered employers to furnish a wage statement with every payment of wages.
State + local withholdingPennsylvania payroll can involve state PIT, local EIT/LST, and Philadelphia Wage Tax.
Reviewed 2026-10-03Checked against current official sources.
AT A GLANCE
What distinguishes Pennsylvania pay-period records
Pennsylvania requires a wage statement with every payment of wages and combines a flat state Personal Income Tax with a highly location-sensitive local earned-income-tax system. Employers may also need to account for employee unemployment-compensation withholding, employer UC contributions, workers’ compensation, and Philadelphia Wage Tax.
State income tax
Pennsylvania employers generally withhold state Personal Income Tax at a flat rate of 3.07% from compensation subject to withholding.
View state withholding guidance →Unemployment compensation
For 2026, newly liable non-construction employers use a total contribution rate of 3.8220%, while newly liable construction employers use 10.5924%. Employee UC withholding remains 0.07% of gross wages.
View 2026 UC highlights →Workers’ compensation
Pennsylvania generally requires workers’ compensation coverage when an employer has at least one employee who is covered by the Workers’ Compensation Act.
View coverage requirements →STATE PAYROLL OVERVIEW
What makes Pennsylvania different from other pay-statement jurisdictions
Pennsylvania’s pay-statement rule is direct: every covered employer must furnish each employee a statement with every payment of wages listing hours worked, rates paid, gross wages, applicable minimum-wage allowances, deductions, and net wages.
The tax side is more layered. Pennsylvania state Personal Income Tax withholding is generally 3.07%, but employers with Pennsylvania worksites may also need to withhold local Earned Income Tax and Local Services Tax. The applicable local EIT depends on the employee’s residence and worksite, and employers use Political Subdivision Codes to direct the tax to the correct jurisdiction.
Philadelphia adds another distinct layer. Philadelphia residents and nonresidents working in the city can be subject to the City Wage Tax, with rates that changed effective July 1, 2026.
PAYROLL REQUIREMENTS CHECKLIST
The Pennsylvania requirements checklist
Use this checklist to review the wage-statement fields and the state, local, unemployment, and workers’ compensation obligations that may affect a Pennsylvania payroll.
When a statement is required
Furnish a wage statement with every payment of wages to each covered employee.
Information to include
List hours worked, rates paid, gross wages, allowances claimed as part of the minimum wage if any, deductions, and net wages.
State and local withholding
Withhold Pennsylvania Personal Income Tax at the current state rate when required, then determine whether local Earned Income Tax and Local Services Tax apply based on the employee’s residence and worksite.
Other employer obligations
Review unemployment-compensation contributions and employee UC withholding, workers’ compensation coverage, local PSD-code requirements, and Philadelphia Wage Tax where applicable.
PAYROLL RECORDS IN PRACTICE
How Pennsylvania treats the statement after payday
Statement delivery
Pennsylvania’s regulation focuses on furnishing the required statement with every payment of wages. Employers should use a delivery method that gives the employee the required pay-period information in a usable form.
Retention and access
Pennsylvania employers covered by the minimum-wage regulations must keep true, accurate, and legible employee payroll records for three years from the date of the last entry. The records include wage rates, hours, earnings, deductions, and other information needed to support payroll compliance.
STATE WITHHOLDING IS ONLY ONE PART OF PENNSYLVANIA PAYROLL
Use the 3.07% state rate—and check the employee’s local tax location
Pennsylvania employers generally withhold state Personal Income Tax at 3.07% from taxable compensation. Employers with Pennsylvania worksites must also determine the applicable local Earned Income Tax and Local Services Tax using the employee’s residence, worksite, PSD codes, and current local rates.
Pennsylvania state withholding
Pennsylvania requires employers to withhold state Personal Income Tax at a flat 3.07% from compensation subject to withholding.
View state withholding guidance →Local EIT and LST
Employers with worksites in Pennsylvania generally must withhold and remit local Earned Income Tax and Local Services Tax. Use the official address search and PSD-code resources to identify the correct local rates and tax collector.
View employer local-tax instructions →LOCAL CONSIDERATIONS
Pennsylvania payroll depends heavily on residence and worksite location
Pennsylvania’s local earned-income-tax system makes worksite and residence data operational payroll inputs rather than background details. Employers should collect the employee’s residency information, identify the worksite PSD code, and use current local rates rather than assuming the state PIT calculation completes the withholding setup.
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PSD codes and local EITPolitical Subdivision Codes identify Pennsylvania municipalities for local Earned Income Tax purposes. Employees complete a Residency Certification Form so employers can determine the correct residence and worksite codes.
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Higher-of-two EIT ruleFor employees who live and work in Pennsylvania, the applicable EIT withholding generally uses the higher of the employee’s resident EIT rate or the work-location nonresident EIT rate.
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Home-based Pennsylvania employeesA Pennsylvania residence used as a home-based worksite can be a business worksite for local-tax purposes. Employers should not assume remote work removes local EIT/LST obligations.
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Philadelphia Wage TaxEffective July 1, 2026, Philadelphia’s Wage Tax rate is 3.735% for residents and 3.425% for nonresidents who are subject to the tax. Philadelphia residents owe the Wage Tax regardless of where they work, while nonresidents who work in Philadelphia may also be subject to withholding.
A SOURCE-BACKED WORKFLOW
A source-backed workflow for Pennsylvania payroll records
1Confirm residence and worksiteCollect the employee’s home address and Pennsylvania worksite so the correct PSD codes, EIT rate, LST treatment, and Philadelphia rules can be evaluated.›
2Enter employer and employee detailsAdd the employer, pay period, employee information, hours, rates, withholding setup, deductions, and applicable local tax details.›
3Review Pennsylvania payroll calculationsReview gross pay, federal withholding, 3.07% Pennsylvania PIT withholding, applicable EIT/LST, employee UC withholding, deductions, and net pay.›
4Generate the recordsComplete the Pay Run and generate employee and bookkeeping records that reflect the pay-period calculations and deductions.›
5Keep supporting recordsRetain the payroll records required by Pennsylvania and preserve the location and residency information used to support local withholding decisions.›
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OFFICIAL PENNSYLVANIA SOURCES USED FOR THIS PAGE
Official Pennsylvania sources used for this page
This guidance is based on official Pennsylvania regulations and state and local government resources. Rates and tax assignments can change, so recheck the applicable source before acting.
01
Pennsylvania Code — Wage Statements and Employer Records
Primary regulation for wage statements with each payment and the three-year employer-record requirement.
02
Pennsylvania Department of Revenue — Employer Withholding
Official guidance on Pennsylvania Personal Income Tax withholding.
03
Pennsylvania Department of Labor & Industry — UC Tax
Current unemployment-compensation contribution information and annual 2026 rate highlights.
04
Pennsylvania DCED — Local Income Tax Requirements for Employers
Official guidance on local EIT, LST, PSD codes, worksite rules, and residency certification.
05
Pennsylvania Workers’ Compensation Compliance
Official coverage guidance for employers with covered employees.
RESEARCH & REVIEW
Built from primary sources. Reviewed for accuracy.
This page is built from primary Pennsylvania state regulations, tax resources, labor guidance, local-tax resources, and Philadelphia government sources and is periodically reviewed against current guidance.
FREQUENTLY ASKED QUESTIONS
Pennsylvania pay-statement FAQ
Does Pennsylvania require a wage statement with every paycheck?
Pennsylvania regulations require covered employers to furnish each employee a statement with every payment of wages.
What information should the Pennsylvania wage statement show?
The statement lists hours worked, rates paid, gross wages, any allowances claimed as part of minimum wage, deductions, and net wages.
How long should Pennsylvania payroll records be kept?
Covered employers must preserve required payroll records for three years from the date of the last entry.
What is Pennsylvania’s state income-tax withholding rate?
Pennsylvania employers generally withhold state Personal Income Tax at 3.07% from compensation subject to withholding.
Do Pennsylvania employers also withhold local taxes?
Often, yes. Employers with Pennsylvania worksites generally must determine local Earned Income Tax and Local Services Tax using the employee’s residence and worksite. The applicable EIT rate can depend on the higher of the resident rate or work-location nonresident rate.
Does Philadelphia have a separate wage tax?
Yes. Effective July 1, 2026, the Philadelphia Wage Tax rate is 3.735% for residents and 3.425% for nonresidents subject to the tax. Employers should use the City’s current Wage Tax instructions for Philadelphia-covered employees.
ACCURATE RECORDS. SUPPORTING EVIDENCE.
Use accurate records, review the preview, and keep the supporting evidence.
Prepare a Pennsylvania Pay Run, review the state and local calculations before completion, and keep the applicable Pennsylvania sources with your payroll workflow.