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Navigating Pennsylvania Payroll Taxes
Pennsylvania employers must comply with several state payroll tax requirements, including New Hire Reporting, state income tax withholding, annual withholding reconciliation, and unemployment compensation (UC) reporting. These obligations are administered by the Pennsylvania Department of Revenue and the Pennsylvania Department of Labor & Industry and apply to most employers with workers in Pennsylvania.
This guide provides a comprehensive overview of Pennsylvania payroll tax filing requirements, including New Hire Reporting, withholding deposit Form PA-501, annual reconciliation Form REV-1667, and unemployment insurance reporting Forms UC-2 and UC-2A. It also covers filing deadlines, payment requirements, reporting methods, and correction procedures to help employers stay compliant, avoid penalties, and ensure accurate payroll tax reporting.
Pennsylvania New Hire Reporting
New Hire Reporting is a legal requirement for employers in Pennsylvania to report information about newly hired and rehired employees to the Pennsylvania New Hire Reporting Program. This program is administered by the Pennsylvania Department of Labor & Industry and is accessible through the PA CareerLink® system.
Who must report
All Pennsylvania employers must report newly hired and rehired employees who live or work in Pennsylvania. This includes:
- Full-time and part-time employees
- Temporary and seasonal employees
- Employees rehired after separation or a break in service
- Employees hired for short durations or probationary periods
This requirement applies to both in-state and out-of-state employers with employees working in Pennsylvania. Multi-state employers may report all new hires to one designated state if registered accordingly.
What to report
When submitting a new hire report, employers must provide the following information:
Employer information:
- Federal Employer Identification Number (FEIN)
- Business name
- Business address
- Employer contact person name and phone number
Employer information:
- Full legal name
- Address
- Social Security Number (SSN)
- Date of hire
- State of hire
- Date of birth (optional but recommended)
Reporting Requirements
- New employees - Employers must report all employees who live or work in Pennsylvania, regardless of the length of their employment.
- Re-hired employees - Employers must report re-hired employees or employees who return to work after a break in service or gap in wages. This includes employees like teachers, substitutes, and seasonal workers.
- Temporary employees - Temporary agencies are required to report any employer who is hired for an assignment.
When to report
Employers must report newly hired and rehired employees within 20 calendar days of the employee’s date of hire.
The hire date is defined as the first day the employee performs services for wages. Timely reporting ensures compliance and allows the state to promptly process child support enforcement and fraud prevention activities.
How to report
Pennsylvania offers multiple reporting methods through the PA CareerLink® New Hire Reporting system.
1. Online (Recommended):
- Employers can report new hires online through the official PA CareerLink® portal:
- Online reporting is the fastest and most secure method.
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2. File Upload / Bulk Reporting:
- Employers and payroll providers can upload new hire data files using approved templates through the PA CareerLink® portal.
-
This option is recommended for employers reporting multiple employees or payroll service providers handling
large volumes.
3. Fax:
- Complete the new hire report and fax it to 866-748-4473.
- Keep a copy of the fax confirmation for your records.
4. Mail:
Complete the New Hire Report and mail it to:
Pennsylvania New Hire Reporting Program
P.O. Box 69400
Harrisburg, PA 17106-9400
Use certified or trackable mail for proof of delivery.
Employers submitting their new hire information via toll-free fax, or by standard postal mail requires an IRS Form W-4, the standard Commonwealth New Hire Reporting Form (available on PA CareerLink®), or an approved substitute.
For Multi-State Employers:
Employers who have employees in more than one state is considered a multi-state employer. They have two options for reporting new hires:
- Report newly hired employees in the state they are working
- Select one state where you have employees and report all new hires to that state electronically.
New Hire Reporting Penalties
Pennsylvania requires employers to report new hires within 20 days of hire. Non-compliance can result in a written warning for the first violation, followed by civil fines of up to $25 per employee. Conspiracy to fail to report can lead to fines of up to $500 per employee.
Corrections
Employers can correct previously submitted new hire reports through the PA CareerLink® reporting system.
To correct a submission:
- Log in to the PA CareerLink® New Hire Reporting portal
- Update the incorrect employee or employer information
- Submit the corrected report
For assistance, employers may contact the program directly:
Phone: 888-724-4737
Email: ra-li-cwds-newhire@pa.gov
Form PA-W3: Employer Quarterly Reconciliation Return of Income
Tax Withheld
Pennsylvania employers must file withholding tax returns to report and reconcile the state income tax withheld from employees’ wages. The primary reconciliation form is Form PA-W3, Employer Quarterly Reconciliation Return of Income Tax Withheld, which ensures that taxes withheld from employee wages are accurately reported and remitted to the Commonwealth.
The PA-W3 reconciliation compares the total tax withheld, total compensation subject to withholding, and total payments made during the reporting period. Employers must file this form even if no tax is due.
Who Must File
All employers registered for Pennsylvania employer withholding tax must file Form PA-W3. This includes:
- Businesses of all sizes
- Nonprofit organizations
- Government agencies
- Employers withholding Pennsylvania personal income tax from employees
Even if no tax was withheld during a period, employers must still file Form PA-W3 for that period.
Form Types
Pennsylvania uses the PA-W3 reconciliation return along with deposit schedules assigned by the Department of Revenue.
PA-W3: Employer Quarterly Reconciliation Return of Income Tax Withheld
Purpose:
Reconciles the total Pennsylvania income tax withheld from employee wages with the payments made to the state during the quarter.
Filing Requirement:
Filed quarterly by employers to report:
- Total compensation subject to PA withholding
- Total PA income tax withheld
- Total withholding payments made during the quarter
- Any balance due or overpayment
As shown on the official form:
- Line 1: Total compensation subject to PA tax
- Line 2: Total PA withholding tax
- Line 3: Total deposits for quarter
- Line 4: Overpayment (if applicable)
- Line 5: Tax due (if applicable)
Due Date: Form PA-W3 is due on or before the last day of the month following the end of the quarter being filed.
- Quarter 1: (Jan–Mar) April 30
- Quarter 2: (Apr–Jun) July 31
- Quarter 3: (Jul–Sep) October 31
- Quarter 4: (Oct–Dec) January 31
What to Report
Employers must report the following on Form PA-W3:
Employer Information:
- Employer name
- Business address
- Federal Employer Identification Number (FEIN)
- Employer Account ID
Wage and Tax Information:
- Total compensation subject to Pennsylvania tax
- Total PA income tax withheld
- Total deposits made during the quarter
- Overpayment or tax due amount
This ensures that all withheld employee taxes are properly reconciled and paid.
How to File
Pennsylvania strongly encourages electronic filing through its official online system.
1. Online (Preferred):
- Employers can file PA-W3 electronically using the state’s e-TIDES or myPATH system.
-
Steps:
- Register or log in to your myPATH account
- Select Employer Withholding Tax
- Complete and submit Form PA-W3 electronically
- Submit payment electronically if tax is due
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2. By Mail (if permitted):
-
Employers may file Form PA-W3 by mailing the completed form with payment (if applicable) to:
PA Department of Revenue
Dept. 280401
Harrisburg, PA 17128-0903 - Payment by check can be included with the mailed form.
How to Pay
Pennsylvania employers must deposit withheld state income tax using Form PA-501, Employer Deposit Statement of Withholding Tax. This form is used to submit periodic withholding tax payments and ensure they are properly credited to your employer account.
Payment Methods
1. Online Payment (Recommended)
Employers can make withholding tax payments electronically through the Pennsylvania Department of Revenue’s online tax system.
Online payments offer:
- Faster processing
- Immediate payment confirmation
- Reduced risk of delays or errors
- Secure ACH debit payments
2. Mail Payment with Form PA-501
If you are submitting your payment by mail, you must complete Form PA-501 and include it with your payment.
Mailing Address:
PA Department of Revenue
Dept. 280401
Harrisburg, PA 17128-0903
This is the official mailing address provided for submitting the deposit statement and payment.
When mailing your payment:
- Enter your Employer Account ID and Federal EIN
- Provide the deposit period and withholding amount
- Sign and date the form
- Include your payment with the completed PA-501
3. Electronic Funds Transfer (EFT)
Employers may submit withholding tax payments using Electronic Funds Transfer (EFT).
EFT is typically required if your withholding amount exceeds certain thresholds and allows payments to be transferred securely from your bank account to the state.
Employers using EFT should coordinate payments through their financial institution and ensure payments are submitted according to their assigned deposit frequency.
Deposit Frequency Requirements
Your payment frequency is assigned based on your withholding amount:
- Quarterly: Less than $300
- Monthly: $300 to $999
- Semi-monthly: $1,000 to $4,999.99
- Semi-weekly: $5,000 or more
You must submit payments according to your assigned frequency to avoid penalties.
Pennsylvania Withholding Penalties
Employers must file Form PA-W3 and pay withholding taxes on time. Failure to comply may result in penalties and interest under Pennsylvania tax law.
Late-Filing Penalty
If Form PA-W3 is filed after the due date:
- Penalty is 5% of the unpaid tax for each month or fraction of a month the return is late
- Maximum penalty is 25% of the unpaid tax
This penalty applies until the return is filed or reaches the maximum penalty limit.
Late-Payment Penalty
If withholding tax is not paid on time:
- Penalty is 5% of the unpaid tax for each month or fraction of a month the payment is late
- Maximum penalty is 25% of the unpaid tax
In addition, interest is charged on unpaid tax balances until the tax is fully paid.
Interest rates are updated annually by the Pennsylvania Department of Revenue.
Pennsylvania Withholding Corrections
If errors are discovered after filing Form PA-W3, employers must file an amended return.
To correct withholding filings:
- Log in to the myPATH system
- Select the applicable period
- Submit an amended PA-W3 return
Alternatively, employers may submit an amended paper form if required.
Pennsylvania Unemployment Insurance (UI) Reporting — Forms UC-2
and UC-2A
Pennsylvania employers must file Form UC-2, Employer’s Quarterly Report, and Form UC-2A, Employer’s Quarterly Report of Wages Paid to Each Employee, to report wages and pay unemployment insurance (UI) contributions to the Pennsylvania Department of Labor & Industry.
Who Must File
All employers registered with the Pennsylvania UC program must file Forms UC-2 and UC-2A each calendar quarter if they:
- Have employees performing covered services in Pennsylvania, or
- Are registered and assigned a Pennsylvania UC account number
This includes businesses of all sizes, nonprofit organizations, government agencies, and household employers meeting coverage thresholds.
You must file Form UC-2 or UC-2A even if no contributions are due for the quarter.
Taxable Wage Base & Contribution Rates
Pennsylvania assigns unemployment tax based on each employee’s taxable wages and the employer’s assigned
contribution rate.
Annual Wage Base:
- For 2025, Pennsylvania’s unemployment insurance taxable wage base is $10,000 per employee per year.
- Wages paid to an employee above $10,000 are not subject to UI tax for the calendar year.
Contribution Rate:
Pennsylvania assigns UC contribution rates annually based on employer experience and statutory requirements.
-
New Employers:
New employers in Pennsylvania are assigned standard contribution rates depending on industry:
- Non-construction employers: 3.822%
- Construction employers: 9.933%
-
Experienced Employers:
For experienced employers, contribution rates vary based on experience rating and benefit charges.
For 2025, experienced employer rates range from:
- Minimum rate: 1.419%
- Maximum rate: 10.373%
What to Report
Employers must include the following information when filing Forms UC-2 and UC-2A:
Form UC-2 (Quarterly Summary Report):
- Employer UC Account Number
- Federal Employer Identification Number (FEIN)
- Total gross wages paid during the quarter
- Taxable wages (up to wage base)
- Contribution rate
- Total UC contributions due
Form UC-2A (Employee Wage Report):
- Employee name
- Employee Social Security Number (SSN)
- Gross wages paid during the quarter
When to File
Forms UC-2 and UC-2A must be filed quarterly. The due dates are:
- Q1 (Jan–Mar): Due April 30
- Q2 (Apr–Jun): Due July 31
- Q3 (Jul–Sep): Due October 31
- Q4 (Oct–Dec): Due January 31 of the following year
How to File
Pennsylvania strongly encourages employers to file unemployment reports electronically.
1. Online (Recommended):
Employers can file using the Pennsylvania Unemployment Compensation Management System (UCMS):
Using UCMS, employers can:
- Submit Forms UC-2 and UC-2A electronically
- Enter or upload wage data
- Calculate contributions automatically
- Make payments securely
Employers who are unable to comply with the electronic filing requirements must request a temporary waiver allowing submission via paper Forms UC-2 and UC-2A.
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2. By Mail:
Employers may submit paper Forms UC-2 and UC-2A by mail if electronic filing is not required.
-
Mail the completed form to:
PA Department of Labor & Industry,
Office of Unemployment Compensation Tax Services,
PO Box 68568,
Harrisburg, PA 17106-8568.
3. File Upload (Bulk Filing):
- Employers and payroll providers can upload wage reports electronically using file upload functionality in UCMS.
Tax Payments
Pennsylvania employers must submit unemployment compensation (UC) contributions to the Pennsylvania Department of Labor & Industry based on their quarterly reported liability.
Electronic Payment Requirement (Mandatory Threshold)
Employers are required to pay UC contributions electronically if:
- Your total UC contribution liability equals or exceeds $5,000 for a payment period
Once this threshold is met:
- All future payments must be made electronically, even if the amount due in later quarters falls below $5,000
- This requirement remains in effect unless the department grants a waiver
Electronic Payment Methods
Employers can submit payments electronically using:
- ACH Debit (direct withdrawal from bank account)
- ACH Credit (through your financial institution)
- Online payment through the Pennsylvania UC Tax Online Services portal
These methods provide faster processing, secure payment tracking, and immediate confirmation.
Waiver Option
Employers unable to comply with the electronic payment requirement may request a temporary waiver from the department. If approved, employers may submit paper payments for the approved period only.
Pennsylvania UC-2/UC-2A Penalties
Pennsylvania enforces penalties for late filing, late payment, and failure to comply with electronic filing/payment requirements.
Late Filing Penalty
If Form UC-2/UC-2A is not filed on time or not filed in the required manner:
- Penalty: 15% of the total UC contributions due for the quarter
- Minimum penalty: $125
- Maximum penalty: $450
This applies even if contributions are paid, but the quarterly report is filed late.
Failure to Comply with Electronic Payment Requirement
If an employer fails to submit payment electronically after meeting the $5,000 threshold:
- Penalty: 10% of the payment amount
- Minimum penalty: $25 per occurrence
- Maximum penalty: $500 per occurrence
This applies unless an approved waiver is in place.
Dishonored Payment Penalty
If a payment is returned or dishonored by a financial institution:
- Penalty: 10% of the face value of the payment
- Minimum penalty: $25 per occurrence
- Maximum penalty: $1,000 per occurrence
Pennsylvania Corrections (Form UC-2X)
If you discover errors in a previously filed UC-2 or UC-2A report, you must file Form UC-2X, Employer’s Quarterly Report Adjustment Form, to correct the information.
When to File
File Form UC-2X if you need to correct:
- Employee wages
- Taxable wages
- UC contributions due
- Employee information
- Previously reported quarterly totals
Information Required
Employers must provide:
- Employer UC Account Number and FEIN
- Reporting quarter and year being corrected
- Corrected wage and contribution amounts
- Explanation of the correction
- Contact information
How to File
Corrections can be submitted:
- Electronically through the UC Tax Online Services portal (recommended)
- By completing and submitting Form UC-2X as instructed on the form
Timely corrections help reduce additional penalties and ensure accurate UC contribution records.
Form REV-1667: Pennsylvania Annual Withholding Reconciliation Statement
Form REV-1667 is Pennsylvania’s annual reconciliation form for state income tax withholding. Employers use this form to report the total Pennsylvania personal income tax withheld from employee wages during the calendar year and reconcile those amounts with deposits previously submitted to the Pennsylvania Department of Revenue.
This reconciliation ensures the total withholding reported throughout the year matches the employee Forms W-2 and the payments made to the state.
Who Must File
You must file Form REV-1667 if you are an employer that:
- Withheld Pennsylvania personal income tax from employee wages during the year, and
- Issued Forms W-2 to employees showing Pennsylvania withholding
This requirement applies to:
- All businesses with employees working in Pennsylvania
- Employers registered for the Pennsylvania employer withholding tax
- Employers who reported withholding using periodic deposit forms, such as PA-501
- Employers filing Pennsylvania W-2 wage records
Even if no additional tax is due, employers must still file REV-1667 to reconcile annual withholding totals.
What to Report
Employers must report the following on Form REV-1667:
Employer Information:
- Employer name and address
- Federal Employer Identification Number (FEIN)
- Pennsylvania Employer Account ID
Withholding Summary Information:
- Total Pennsylvania wages paid
- Total Pennsylvania personal income tax withheld
- Total withholding deposits submitted during the years
- Total tax liability reconciled with deposits
Employee Wage Records:
- Copies of Forms W-2 showing Pennsylvania withholding
- Annual wage and tax totals matching reconciliation figures
When to File
Due Date: January 31, following the end of the calendar year
If January 31 falls on a weekend or state holiday, the due date moves to the next business day.
Employers must file REV-1667 together with:
- Copies of all employee Forms W-2
- Any required annual wage reporting reconciliation information
Failure to file the reconciliation on time or filing incorrect totals may result in penalties, interest, or delays in processing employee tax records.
How to File
Electronic Filing (Recommended)
Employers can file electronically through the Pennsylvania Department of Revenue’s e-Services portal.
Electronic filing provides:
- Faster processing
- Reduced errors
- Immediate confirmation
- Secure submission of W-2 records
Paper Filing
Employers may also file by submitting Form REV-1667 and W-2 copies to the department using the address listed in the official instructions.
Paper filing requires:
- Completed Form REV-1667
- All required W-2 statements
- Accurate reconciliation of withholding and deposits
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| Forms | Pricing* |
|---|---|
| New Hire Reporting | $1 / Employee |
| Withholding Form (W-3) | $5.95 |
| Unemployment Wage Report (UC-2/2A) | $5.95 |
| Annual Reconciliation (Form REV-1667) | $5.95 |
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- Form PA-W3
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Frequently Asked Questions
How soon must employers report new hires in Pennsylvania?
Pennsylvania employers must report all newly hired and rehired employees within 20 days of the employee’s hire date. The hire date is defined as the first day the employee performs services for wages. Employers submitting reports electronically in batches may submit twice monthly, spaced 12 to 16 days apart.
Do employers need to report independent contractors in Pennsylvania?
No. Pennsylvania currently requires reporting of employees only, not independent contractors. This differs from some states that require contractor reporting. Only individuals classified as employees for federal tax purposes must be reported.
What happens if an employer fails to report new hires?
Failure to report new hires may result in financial penalties and compliance enforcement actions. Non-compliance can result in a written warning for the first violation, followed by civil fines of up to $25 per employee. Conspiracy to fail to report can lead to fines of up to $500 per employee.
Do employers need to file REV-1667 if they already submitted withholding deposits using PA-501?
Yes. Form REV-1667 is required even if all withholding deposits were made during the year. This form serves as the annual reconciliation, ensuring total deposits match employee Forms W-2 and employer withholding records.
What happens if the withholding reported on REV-1667 does not match W-2 totals?
If totals do not match, the Pennsylvania Department of Revenue may:
- Issue a notice requesting correction
- Delay processing of employee tax returns
- Assess penalties or interest if underreported
Employers must submit corrected reconciliation and W-2 information promptly.
Are employers required to file REV-1667 electronically?
Electronic filing is strongly recommended and required in many cases, especially for employers submitting multiple W-2 records. Electronic filing improves processing speed, accuracy, and compliance with Pennsylvania reporting requirements.
Do employers need to file UC-2 and UC-2A if no wages were paid during the quarter?
Yes. Employers must file quarterly UC-2 and UC-2A reports even if no wages were paid or no contributions are due, as long as the employer has an active UC account. This is known as filing a zero-wage report.
What is the difference between Form UC-2 and UC-2A?
- Form UC-2: Quarterly employer summary report showing total wages and contributions
- Form UC-2A: Employee wage detail report listing each employee’s wages
Both forms must be filed together each quarter to ensure accurate wage reporting and contribution calculation.
Can employers correct errors after filing UC-2 or UC-2A?
Yes. Employers must file Form UC-2X (Adjustment Form) to correct errors in previously submitted reports. Corrections may include:
- Wage adjustments
- Employee information corrections
- Contribution recalculations
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