Month-end close: payroll tax in Pennsylvania

Pennsylvania withholds a flat 3.07% and sets the deposit schedule from quarterly withholding: quarterly, monthly, semi-monthly or semi-weekly.

This is part of the payroll checklist. Do the federal steps first. Pennsylvania income tax withholding is filed with the Pennsylvania Department of Revenue, and unemployment compensation (UC) with the Department of Labor & Industry.

Rate. Withholding is a flat 3.07% of compensation. State unemployment compensation has a $10,000 taxable wage base, and a 0.07% employee contribution on gross wages.

Filing. Deposits follow quarterly withholding: under $300 is quarterly, $300 to $999 monthly, $1,000 to $4,999.99 semi-monthly, and $5,000 or more semi-weekly. A quarterly withholding return, the W-3, is filed each quarter.

Due. Quarterly returns on April 30, July 31, November 2 and February 1, 2027. Monthly deposits on the 15th of the following month, except December's, due February 1, 2027. The annual reconciliation on January 31, 2027.

The trap. Late UC contributions, the employer's and employees', carry interest of 1% a month, 12% a year, charged for each month or part of a month.

The month-end steps

1. Check the withholding rate. Pennsylvania personal income tax is withheld at a flat 3.07% of compensation, from resident and nonresident employees earning income in Pennsylvania [1]. Done when each paycheck's state withholding is 3.07% of compensation.
2. Find the deposit schedule. It follows total withholding per quarter [1]. Done when the schedule on file matches the client's quarterly withholding.

3. File the quarterly return. The W-3 is filed each quarter. The 2026 return dates for quarterly, monthly, semi-monthly and semi-weekly filers are April 30, July 31, November 2 and February 1, 2027 [2] [1]. The annual withholding reconciliation (REV-1667), with the individual W-2 and 1099 statements, is due January 31, 2027 [2]. Done when each return ties to the quarter's withholding paid and the reconciliation is on the client's calendar.
4. Check unemployment compensation. The taxable wage base is $10,000. The employee contribution rate is 0.07%, applied to gross wages, and the employer withholds it from each employee's pay [3]. Done when the UC liability account ties to the contributions on the register.
5. Know what late UC costs. Interest on unpaid contributions, both the employer's and the employees', runs at 1% a month, 12% a year, for each month or part of a month from the due date to the date paid [3]. Done when the quarter's contributions were paid by their due date.
6. Tie the liabilities. Done when the withholding and UC accounts are at zero after the period's payments, or equal the amounts not yet due.