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Pennsylvania’s 3.07% flat state income tax is low, but 2,500+ local EIT jurisdictions and the Philadelphia wage tax make PA one of the most administratively complex payroll states. Rippling tracks local EIT by employee home municipality automatically.
Pennsylvania is one of the US’s largest economies, anchored by Philadelphia (financial services, healthcare, pharma, tech) and Pittsburgh (tech, healthcare, education). Pennsylvania payroll is characterized by a 3.07% flat state income tax, but the local Earned Income Tax (EIT) system — covering over 2,500 Pennsylvania municipalities — adds significant administrative complexity. Philadelphia has its own wage tax system entirely separate from the state EIT framework. Pennsylvania is among the most administratively complex payroll states despite its low headline tax rate.
Rippling’s Pennsylvania payroll module provides:
| Contribution | Rate | Notes |
|---|---|---|
| FUTA | 6.0% (net 0.6%) | After SUTA credit; first $7,000 |
| PA SUI (employer) | New employer 3.689% | On first $10,000 of wages (2024) |
| Social Security | 6.2% | Up to $168,600 (2024) |
| Medicare | 1.45% | No wage base limit |
| Workers’ Compensation | Varies by risk class | Mandatory |
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| Contribution | Rate | Notes |
|---|---|---|
| Federal Income Tax | Graduated 10–37% | Per W-4 |
| Social Security | 6.2% | Up to $168,600 (2024) |
| Medicare | 1.45% + 0.9% surtax | Surtax above $200K single |
| PA State Income Tax | 3.07% flat | One of the lowest flat rates in the US |
| PA Local EIT | Varies (1–4%+) | Based on employee home municipality; Philadelphia: 3.75% residents / 3.44% non-residents |
| PA SUI (employee) | 0.07% | Nominal employee SUI contribution |
| Pennsylvania Income | PA Rate |
|---|---|
| All income | 3.07% flat |
Plus local EIT based on employee home municipality (1–4%+). Philadelphia wage tax: 3.75% residents / 3.44% non-residents. Total combined state+local can reach ~7%+.
Final Pay: Pennsylvania requires final pay on the next regularly scheduled payday. Accrued vacation: PA Wage Payment and Collection Law treats promised vacation as wages — a written forfeiture policy communicated before employment is generally enforceable.
Pennsylvania has over 2,500 taxing jurisdictions with local Earned Income Tax (EIT). Employers withhold EIT based on the employee’s municipality of residence (not work location). Rates range from 1% to over 4%. Philadelphia has its own wage tax (3.75% residents; 3.44% non-residents). Rippling tracks EIT by employee home municipality.
Philadelphia imposes a wage tax of 3.75% (residents) and 3.44% (non-residents working in Philadelphia). This is withheld by the employer and remitted quarterly to the City of Philadelphia Department of Revenue — separate from PA state income tax.
Pennsylvania’s state income tax rate is 3.07% flat — one of the lowest flat rates in the US. However, the combined state + local EIT burden is higher than the headline rate suggests. PA state withholding is remitted to PA DOR monthly or quarterly.
Pennsylvania’s minimum wage is $7.25/hour statewide (matches federal). Philadelphia: $15.00/hour (January 2024). Pittsburgh has not enacted a local minimum above state.
