2025 Pennsylvania Payroll Tax Rates

Abacus Payroll presents an updated summary of all changes to Pennsylvania payroll tax rates in 2025.

Pennsylvania Minimum Wage

The effective rate per hour for 2025 is $7.25  (effective 07/24/2009). 

Pennsylvania Income Tax Rate

The withholding rate for 2025 remains at 3.07%.

Pennsylvania Unemployment Tax

The employee rate for 2025 remains at 0.07%. Wages subject to unemployment contributions for employees are unlimited. Wages subject to unemployment contributions for employers remains at $10,000.

City of Philadelphia Wage Tax

Effective July 1, 2024, the tax rates remains unchanged at 3.75% for Philadelphia residents and 3.44% for nonresidents. These rates are adjusted by the City of Philadelphia on July 1st of each year.

Pennsylvania 1099-MISC/NEC Withholding Tax

There is a withholding requirement for payors of Pennsylvania-source non-employee compensation and business income to non-resident individuals. In addition, lessees of Pennsylvania real estate making “lease payments” to non-resident lessors in the course of a trade or business are required to withhold personal income tax on payments of $5,000 or more annually. The 1099-MISC/NEC forms will need to be filed with the Pennsylvania Department of Revenue by January 31, 2025 along with the Annual Withholding Statement (PA Form Rev-1667). Details can be found at http://revenue.pa.gov.

Pennsylvania Local Tax Rate

Act 32 is a law that reformed and standardized the local earned income tax (EIT) system, which requires uniform withholding of earned income taxes and local services tax with remittance to a single local collector or Tax Officer. For more information, see www.dced.pa.gov.

Download our full Payroll Tax Alert PDF or click here for Federal Wage & Tax Rates.