Payroll Pennsylvania Unique Aspects of Pennsylvania Payroll Law and Practice
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Payroll in Pennsylvania: Understanding Unique Payroll Laws and Practices
Pennsylvania's payroll system has distinct characteristics that employers must be aware of. This guide covers essential aspects such as tax withholding, unemployment insurance, wage laws, and child support regulations in Pennsylvania.
Pennsylvania Income Tax Withholding
The Pennsylvania Department of Revenue is responsible for the collection and reporting of state income taxes from payroll. Here are the contact details:
- Department of Revenue
- Bureau of Business Trust Fund Taxes
- Employer Tax Division, Department 280904
- Harrisburg, PA 17128-0904
- Phone: (717) 783-1488
- Website: [revenue.state.pa.us](http://www.revenue.state.pa.us)
Pennsylvania does not provide a state-specific form for calculating income tax withholding. When it comes to salary reductions under Section 125 cafeteria plans and 401(k) contributions:
- Cafeteria plans are not taxable for income tax if used for health or life insurance, but they are taxable for unemployment insurance.
- 401(k) contributions are taxable for both income and unemployment purposes.
Supplemental wages are taxed at a flat rate of 3.07%. You may choose to file Pennsylvania State W-2s using magnetic media.
Unemployment Insurance in Pennsylvania
The Pennsylvania Department of Labor and Industry manages unemployment insurance:
- Office of Employment Security
- Labor and Industry Building, Seventh and Forster Sts.
- Harrisburg, PA 17121
- Phone: (717) 787-7613
For unemployment purposes, the taxable wage base is up to $8,000. Employers with 250 or more employees must report quarterly wages via magnetic media.
Unemployment records are required to be retained for at least four years and should include details such as employee name, social security number, hire and termination dates, wages, and pay schedules.
Wage and Hour Laws
The Pennsylvania Department of Labor and Industry enforces wage and hour laws:
- Bureau of Labor Law Compliance
- Labor and Industry Building, Room 1301, Seventh and Forster Sts.
- Harrisburg, PA 17120
- Phone: (717) 787-5279
The state's minimum wage is $5.15 per hour. Overtime for non-FLSA-covered employers is paid at 1.5 times the regular rate for hours over 40 per week.
Employers must report new hires and rehires with information including the employee's name, address, hire date, and social security number within 20 days. Failure to do so can result in fines.
Pennsylvania does not mandate direct deposit, specific pay stub information, or wage record retention for abandoned wages. However, final pay for terminated employees is due by the next payday, and deceased employees’ wages up to $5,000 must be paid to the next of kin.
Tip credits cannot exceed 45% of the minimum wage. Youth under 16 must receive a 30-minute break after five hours of work. Wage records should be maintained for a minimum of three years.
Child Support Withholding
The Bureau of Child Support Enforcement oversees child support orders:
- Department of Public Welfare
- P.O. Box 2675, Harrisburg, PA 17105-2675
- Phone: (717) 787-1894
- Website: [pachildsupport.com](http://www.pachildsupport.com)
Child support deductions must begin with the first pay period after 14 days from service, and payments should be sent within seven days of payday. Termination notices must be sent promptly, and administrative fees can’t exceed 2% of the payment, adhering to federal CCPA rules.
Final Note
Please be aware that payroll laws and practices can change. It is advisable to confirm current regulations with state agencies.
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