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Pennsylvania Payroll Tax Rates for 2016

December 21, 2015 | posted by Abacus Payroll
PA Payroll Tax Updates by Abacus

Here is a summary of all the changes to Pennsylvania payroll tax rates in 2015. We keep this page updated, but if you’d like to be alerted to more changes to Pennsylvania Payroll Tax rates in future, you can subscribe to our Payroll Tax Alert Service.

If you’d like help with your payroll tax, we’d be happy to give you a quote. You’ll be assigned your very own payroll tax expert and our prices start at $4 per employee per month.


Pennsylvania Income Tax Rate

The withholding rate for 2016 remains at 3.07%


Pennsylvania Unemployment Tax

The employee rate for 2016 is 0.07%. Wages subject to unemployment contributions for employees are unlimited. Wages subject to unemployment contributions for employers increase to $9,500.


FREE Paycheck and Tax Calculators


City of Philadelphia Wage Tax

Effective July 1, 2015 tax rates are 3.9102% for Philadelphia residents and 3.4828% for nonresidents. These rates are adjusted by the City of Philadelphia on July 1, of each year.


Pennsylvania Local Tax Rate

Act 32 is a law that reforms and standardizes the local earned income tax (EIT) system, which requires uniform withholding of earned income taxes and remittance to a single local collector or Tax Officer. For more information visit the Pennsylvania Department of Community & Economic Development.


New From Abacus Payroll: An HR Help Center


New Hire Reporting Requirements

All employers in Pennsylvania are required to report basic information about employees who are newly hired, re-hired, who return to work after separation of employment, or who are returning from a required leave of absence without pay greater than 30 days. Employers can report this information via the internet at Failure to report a new employee could result in a fine up to $25 per violation. New employers should receive instruction booklets upon registration with the state. Basic employee information which must be provided:


(1) Employee’s name

(2) Employee’s address

(3) Employee’s social security number

(4) Employee’s date of hire and birth

(5) Employer’s name and address

(6) Employer’s federal identification number


For further information contact us or call the State of Pennsylvania at 1-888-724-4737


2016 Wage Tax Rate Summary for Pennsylvania

2016 Current Year 2015 Prior Year
Minimum Wage $7.25 $7.25


Maximum taxable earnings $9,500 $9,000
Employee deduction 0.07% 0.07%


2016 Wage Tax Rates for the City of Philadelphia

2016 Current Year 2015 Prior Year
City Wage Tax
Residents 3.9102% 3.920%
Non-Residents 3.4828% 3.4915%

View more rates on our Federal Payroll Tax Update page.

Print 2016 Payroll Tax alert


About the Author: Abacus Payroll

Abacus Payroll, Inc. is a leading provider of payroll solutions for businesses of all sizes. Whether yours is a family-owned small business or a national corporation, we provide payroll, tax and other financial services on time and at an affordable price. Unlike other payroll providers, Abacus Payroll will assign your very own payroll specialist who will understand your payroll needs inside and out. So no more speaking to a different person each time, no more sitting on hold for hours and most importantly no more missed deadlines! Contact us today to see how we can help your business. You can count on us.