Hibou Odoo Suite Enterprise: State of Pennsylvania
The purpose of this documentation is to outline the processes and requirements associated with becoming a new employer and processing payroll in the state of Pennsylvania. All of these steps are required for running payroll and remaining compliant with the State of Pennsylvania's requirements for employers.
Good to Know!
Federal Employer requirements (obtaining federal identification number, withholding of federal income tax, FICA, and filing of all applicable federal returns (FUTA, 940, 941, and 1099-C) will not be covered below - just Pennsylvania's requirements. Click here for a basic (not all inclusive) IRS checklist for Starting a New Business.
Registering for Income Tax Withholding
Good To Know!
If you already have already registered for Pennsylvania Income Tax Withholding, skip down to the next section.
If you employ one or more persons, you need to register to withhold PA personal income tax on all compensation paid to Pennsylvania resident employees, and on compensation paid to nonresident employees (other than residents of New Jersey, Maryland, Virginia, West Virginia, Ohio and Indiana from whose wages you withhold the reciprocal state’s tax) for work performed in Pennsylvania.
Employers register by filling out a PA Enterprise Registration Form (PA-100) or electronically in e-Tides. To obtain general information for withholding Pennsylvania personal income tax, review the Employer Withholding Information Guide (REV-415); visit the department’s website at www.revenue.pa.gov; call the nearest Revenue district office listed in the government pages of local telephone directories; or call the Taxpayer Service and Information Center at 717-787-1064.
Registering for Unemployment Insurance Account Number
Good to Know!
If you already registered for a Pennsylvania Unemployment Insurance account number, skip down to the next section.
In accordance with the provisions of the Pennsylvania (PA) UC Law, all enterprises providing full and/or part time employment to one or more workers must register with the Department of Labor & Industry, Office of UC Tax Services. An enterprise may be a sole proprietorship, partnership, corporation, limited liability company, business trust, association, etc.
Unemployment Insurance Reporting & Payments
Employers covered by the Pennsylvania (PA) UC Law are required to file reports and remit contributions on a quarterly basis. The reports and contributions are due at the end of the month following the calendar quarter (April 30, July 31, October 31, January 31). If a due date falls on a Saturday, Sunday, or legal holiday, the report will become due on the next business day. Employers are required to report wages for the quarter in which the wages are paid.
Department of Labor & Industry requires that employers file unemployment compensation (UC) quarterly reports electronically through the Unemployment Compensation Management System (UCMS). Paper UC-2 and UC-2A forms are no longer being mailed.
There are several options from which to choose to electronically file UC tax and wage data. These options are:
Online reporting (Only applicable if you are uploading 100 employees or LESS. If you need to submit 100+ employees, use either of the below methods.)
File upload through the employer portal
File Transfer Protocol (FTP)
For information on the file layouts and formats that are necessary for the electronic reporting of UC tax and wage data by file upload or FTP, please review the UC-2010 handbook (PDF).
There are several ways to electronically pay the UC tax due. These options are:
ACH Debit – UCMS will electronically contact the financial institution selected by the employer and will deduct the designated amount
ACH Credit – The employer instructs the financial institution to electronically transmit the designated amount to UCMS
Credit Card – Allows the employer to electronically make a payment with a credit card, or
Print a voucher and mail a payment – Allows the employer to print the payment voucher and mail it to the department with a check
Effective January 1, 2017, employers are required to pay Unemployment Compensation (UC) contributions and reimbursement Statement of Accounts electronically if the total liability owed equals or exceeds $5,000 for a payment period. Once the threshold is met, all subsequent payments must also be submitted electronically, even if amounts due for subsequent periods are less than $5,000.
State Income Tax Withholding
Pennsylvania does not have a form exactly like the federal W-4 form, since Pennsylvania Personal Income Tax is based on a flat tax rate and everyone pays the same rate of 3.07 percent. Pennsylvania does not have allowances based on the number of dependents claimed, marital status, age, etc.
However, you may be entitled to non withholding of PA personal income tax if you incurred no liability for income tax the preceding tax year and/or you anticipate that you will incur no liability for income tax during the current tax year, according to the Special Tax Provisions of section 304 of the Tax Reform Code, the Service member Civil Relief Act (SCRA) or as a resident of the reciprocal state of Indiana, Maryland, New Jersey, Ohio, Virginia or West Virginia and your employer agrees to withhold the income tax from that state.
If you meet these criteria complete form REV-419 and submit it to your employer's payroll office along with any required documentation.
State Income Tax Withholding Reporting and Deposits
Employers currently withhold and remit employees’ taxes on wage and salary income according to the following schedule:
Quarterly – If total withholding is under $300 per quarter, the taxes are due the last day of April, July, October and January.
Monthly – If total withholding is $300 to $999 per quarter, the taxes are due the 15th day of the following month.
Semi-Monthly - If total withholding is $1,000 to $4,999.99 per quarter, the taxes are due within three banking days of the close of the semi-monthly period.
Semi-Weekly – If total withholding is $5,000 or greater per quarter ($20,000 per year), the taxes are due on the Wednesday following the pay dates for employers whose paydays fall on a Wednesday, Thursday or Friday; and on the Friday following the pay dates for employers whose paydays fall on Saturday, Sunday, Monday or Tuesday.
Employers are also required to file reconciliation returns for each quarter and wage and tax statements (W-2s) for all employees and W-2 transmittals.
The PA Department of Revenue has changed the electronic filing requirement threshold for W2 wage records. If you are providing and/or reporting 10 or more W-2 wage records on the Annual Withholding Reconciliation Statement (REV-1667), they must now be filed electronically.
The due date for filing W-2/1099 information is January 31 regardless if this date falls on a weekend or holiday.
New Hire Reporting
To fully comply with Federal and State mandates to report your newly-hired employees, you can go to Pennsylvania's Commonwealth Workforce Development System New Hire Reporting Program web-site.
To register for the first time, click on Register with PA CareerLink.