|For more information, visit the Department of Labor & Industry website or contact the UC Tax Information Line at (866) 403-6163.
Pennsylvania Unemployment Compensation taxes are paid on the first $10,000 of wages for each employee. Pennsylvania’s Unemployment Compensation taxes are experienced-rated with rates ranging from 2.21 percent to 10.5 percent. A new employer will pay contributions at 3.75 percent for non-construction employees and 10.4 percent for construction employees on up to the first $10,000 in taxable wages paid to each employee for the calendar year. This rate remains in effect for approximately two years. After two years, the employer should have sufficient experience to be entitled to a calculated rate.
Surcharges and Adjustments:
- There is a 7.2% Surcharge in effect. The “Surcharge” is factored into the tax rate as a “surcharge adjustment” (basic rate x 7.2% = surcharge adjustment). This is uniform for all employers and is not subject to appeal
- There is a 0.6% (.006) Additional Contribution tax in effect. This is uniform for all employers, except newly liable employers (which is denoted by the reason 4 or 5 in box T of the Form UC-657, Contribution Rate Notice) and is not subject to appeal. This is added in to the rate after the Surcharge Adjustment
- An example of an experience-based total tax rate, which includes the Surcharge Adjustment and the Additional Contribution tax:
- A basic rate of 2.1% multiplied by the 7.2% Surcharge plus the 0.6% Additional Contribution tax (.021 x 7.2% = .001512. Accordingly, the figures used to arrive at the total tax rate would be .021 + .001512 + .006 = .028512)
The Pennsylvania Department of Labor & Industry is responsible for administering the Pennsylvania Unemployment Compensation (UC) Law which requires employers to pay contributions into a pooled reserve known as the Unemployment Compensation Fund. This fund pays benefits to employees who become unemployed through involuntary causes. The amount of contributions an employer owes is determined by multiplying an assigned contribution rate, determined yearly, to the wages paid to employees. If you employ one or more persons, you may be liable for the state unemployment compensation tax and must register with the Bureau of Employer Tax Operations by completing a Pennsylvania Combined Registration Form PA-100. Call (800) 362-2050 or contact the Pittsburgh Field Accounting Service Office at (412) 565-2400.
- Employee withholding is .09% (90 cents per $1,000 gross wages). This is uniform to all employees and is not subject to appeal. There is no cap on the gross wages for which employee withholding is calculated