Pennsylvania pay stubs: state and local tax withholding
Pennsylvania has a flat 3.07% income tax, a small employee unemployment tax and local earned income and services taxes. Here is how a PA paycheck works.
Last reviewed
Rates on this page are for the 2026 tax year and are reviewed every January.
State income tax
Pennsylvania keeps things simple at the state level: one flat rate of 3.07% applies to taxable compensation, with no brackets. The state does not use withholding allowances the way the federal W-4 does, so two employees with the same taxable pay usually have the same state withholding.
Other state payroll deductions
Pennsylvania is one of the few states where employees pay into unemployment insurance. For 2026 the employee contribution is 0.07% of gross wages, and there is no wage cap on it. It appears on stubs as a small line, often labeled PA UC or SUI.
Local taxes
Local taxes are the tricky part of Pennsylvania payroll:
- Earned income tax (EIT). Employers withhold local EIT for employees working at a Pennsylvania worksite. The rate is the higher of the employee's home municipality and school district rate or the work location's non-resident rate. Each location is identified by a PSD code, which the Department of Community and Economic Development publishes at dced.pa.gov.
- Local Services Tax (LST). Many municipalities charge a small flat tax based on where the employee works, usually spread across pay periods. Low-income employees may be exempt.
- Philadelphia. The city has its own wage tax with separate resident and non-resident rates, handled separately from the statewide EIT system.
Federal withholding still applies
- Federal income tax, based on Form W-4.
- Social Security at 6.2% up to the annual Social Security wage base.
- Medicare at 1.45%, plus the 0.9% additional Medicare tax on wages above $200,000.
Creating a Pennsylvania pay stub with PayStubNest
In PayStubNest, enter the employee's hours or salary and choose Pennsylvania. The exact figures on each stub depend on the employee's pay, pay frequency, W-4 choices, deductions and year-to-date totals, and PayStubNest calculates all of it automatically: federal withholding, the state income tax and year-to-date figures that keep running from one stub to the next. Because local EIT depends on two PSD codes, look up both the home and work locations and check the local lines before you finish. Preview is free; you pay only to download.
Record-keeping tip
Keep each employee's residency certification form on file with their stubs. When someone moves, their EIT rate can change mid-year, and having the date of the move documented makes year-end reconciliation much easier. The Pennsylvania Department of Revenue covers state tax questions, and our guides explain each stub field.