Updated: September 15, 2023
Pennsylvania is rooted in history. It’s where the first presidential manor stood, where the first computer was built, where the first daily newspaper was published, and where the stars and stripes were first stitched together. It’s even where Punxsutawney Phil first poked his head out of the thawing winter ground to reveal the arrival, or delay, of spring. But while history remains firm in its truth, payroll taxes are ever-evolving, sometimes changing on a yearly basis. These changes may be intimidating, but our payroll tax calculator will keep everything steady for you during your payroll process.
When you use our payroll calculator, all you have to do is enter wage and W-4 information for your employees. After that, the calculator will process their gross pay, net pay, and deductions for both Pennsylvania and Federal taxes. The calculator will also tell you how much taxes you as the employer will be responsible for paying. Easy enough, right?
Federal payroll tax for Pennsylvania employers
Let’s start with the federal payroll tax, the largest tax liability that your employees face. Below is an overview of the withholding process, but if you would like to learn more, check out our step-by-step guide, where we go over every withholding in detail.
- Gross Wages. Always start with gross wages every pay period. For hourly employees, it’s just their hourly rate multiplied by the number of hours they worked during the pay period. For salaried employees, divide their annual salary by the number of pay periods for the year. Bonuses, commission, and tips also get added to gross wages.
- Pre-Tax Withholdings. If your employees have 401(k), FSA, or any other accounts that fall into this category, deduct the total from their gross wages, since pre-tax withholdings are not subject to income tax.
- Federal Income Tax. Uncle Sam takes anywhere between 0% to 37% of each paycheck. We won’t get into the nitty-gritty in this state guide. Simply go here to learn more about how much federal income tax you should withhold from your employees.
- FICA Taxes: Social Security & Medicare.a. Social Security Tax is 6.2% of each employee’s taxable wages, up to a wage limit of $160,200. This means that the employee’s maximum Social Security Tax for the year is $9,932.00. As an employer, you’re on the hook for this tax as well. You have to match your employee’s contribution dollar-for-dollar.b.Medicare Tax is 1.45% of each employee’s taxable wages until they have earned $200,000 in a given calendar year. Once that earning amount surpasses $200,000, the rate is bumped up to 2.35%. The extra 0.9% tax for higher wage earners is called Additional Medicare Tax (super original, we know). As an employer, you’re only responsible for paying the first 1.45%, not the additional 0.9%.
- FUTA Tax. The Federal Unemployment Tax Act (more commonly known as FUTA) tax is 6% of the first $7,000 taxable income an employee earns. If you pay your state unemployment tax in full and on time, you are able to claim a tax credit of up to 5.4%. Your employees are not responsible for paying the FUTA tax. This one is all on you.
- Post-Tax Withholding. There are also a bunch of different post-tax withholdings your employees may be responsible for paying, so you must take them into consideration as well. These are things like wage garnishments or child support that a court has ordered them to pay.
Pennsylvania state payroll taxes in 2023
As a small business owner, you must fill out Form PA-100 to register for a federal employer identification number for state withholding. So, how much is PA tax? Pennsylvania state income taxes are relatively simple with a 3.07% flat income tax rate. However, it isn’t the only tax you need to take into consideration. There is also a local Earned Income Tax (EIT) that goes up to almost 4%, depending on location. We’d list all the different rates, but we don’t have the time and you definitely don’t have the time, so you can find the withholding rates for the place your business calls home here.
Unemployment insurance in Pennsylvania
Though there’s no state disability insurance in Pennsylvania, there is unemployment compensation.
- Wage bases have increased over the years, with the current base at $10,000 for 2023.
- Rates for 2023 range from 1.419% to 10.3734% with new employers responsible for a rate of 3.822 to 10.5924%.
- If you work in construction, you are expected to pay 10.2238% for 2023.
- Additionally, another 0.06% of each employee’s gross wage is deducted as his or her unemployment tax contribution.
- If you want to learn more, click here.
Write those paychecks!
You’ve calculated each employee’s net pay, factoring in all deductions and withholding requirements. Now, all that’s left to do is pat yourself on the back and write those paychecks! Pay your employees, set aside any contributions your company is responsible for, and try to make your own history. It doesn’t matter if you’re the groundhog or the president, history is history — it’s time to go out and make your own.
More PA payroll tax resources:
Our handy calculator can take you far, but if you’re thirsty for even more knowledge on payroll taxes, here are a couple more resources for your perusal:
Department of Labor & Industry, Office of Unemployment Compensation: UC Registration
PA Tax Talk: Department of Revenue’s Blog
Employer Withholding Guide: Personal Taxes (717) 787-8201 | Business Taxes (717) 787-1064
These rates are based on local legislation and can change at any time. Always consult a tax professional if you are unsure about your obligations.
Additional payroll calculators for Pennsylvania employers
Pennsylvania employers can take advantage of the payroll calculator at the top of this page to quickly calculate their employees’ gross pay, net pay, and deductions in a few clicks. However, every so often, a company needs to do a little more math before they can cut paychecks. For example, do you operate a business where employees get tips from customers? Remember that you are responsible for withholding taxes from your employees’ paychecks based on the tips they receive. Additionally, if an employee leaves for another employer, you’ll need to calculate their final pay. So, if you need a little more help with the number-crunching, check out some of the calculators below.