PA · Payroll tax 2026
The true cost of hiring in Pennsylvania
Estimate what a W-2 employee costs in Pennsylvania and compare it with a 1099 contract using sourced 2026 payroll-tax defaults that you can adjust to your assigned rate.
Estimate a Pennsylvania hire
Pre-filled with a 3.82% base new-employer rate. Adjust SUI, salary, benefits, and the 1099 rate to fit your hire.
Results update instantly. Your values stay in this browser.
A W-2 hire in Pennsylvania costs more than salary. Employers pay federal FICA and FUTA plus state unemployment insurance. For 2026, HiringMath uses a 3.82% base new-employer rate on the first $10,000 of wages, producing up to about $382 of state UI tax per worker before experience-rating or account-specific adjustments. Pennsylvania taxes wage income, which creates a withholding obligation but is not an employer-paid tax. Employee also pays 0.07% SUI. The calculator below combines those statutory items with editable benefits, workers' compensation, and overhead, then compares the result with a 1099 contract.
Pennsylvania employer tax facts
| Item | PA |
|---|---|
| Base new-employer SUI rate | 3.82% |
| SUI taxable wage base | $10,000 |
| Federal FICA (employer) | 7.65% |
| FUTA | 0.6% |
| State income tax on wages | Yes |
| Worker classification test | Construction Workplace Misclassification Act $1,000–$2,500 per violation |
Extra employer taxes: Employee also pays 0.07% SUI.
Example: a $75,000 hire in Pennsylvania
At a $75,000 base salary with typical benefits, a W-2 employee in Pennsylvania costs an employer $99,462 per year — $24,462 above base pay. An equivalent 1099 contract at $75,000 would cost $24,462 less; the breakeven contract rate is $99,462.
Misclassification risk in Pennsylvania
Test: Construction Workplace Misclassification Act $1,000–$2,500 per violation
Construction Workplace Misclassification Act $1,000–$2,500 per violation.
Penalties by stateCompare nearby rates
Pennsylvania's 3.82% new-employer SUI rate sits near New York (4.03%), California (3.4%), Colorado (3.05%), Nevada (2.95%). See the full 51-state comparison or the 2026 employer payroll tax reference.
Common questions
Pennsylvania hiring-cost FAQ
What SUI rate does HiringMath use for Pennsylvania?
The calculator starts with a 3.82% base new-employer rate, applied to the first $10,000 of each employee's 2026 wages. Your assigned rate can differ because of industry, surcharges, and claims history, so replace the default with the rate on your state notice when available.
Does Pennsylvania have a state income tax?
Yes. Pennsylvania taxes wage income. Employers withhold it from employee pay, but it does not directly increase the employer's payroll-tax cost.
What should employers know about worker classification in Pennsylvania?
Construction Workplace Misclassification Act $1,000–$2,500 per violation. This is a planning summary, not legal advice; confirm classification decisions with the relevant agency or counsel.