Q:

What is the PA SUI tax?

A:

PA SUI tax is the Pennsylvania State Unemployment Insurance tax, according to Payroll Taxes. For 2014, the employee contribution rate is 0.07 percent of each $1,000 of wages earned. The contribution rate for established employers ranges from 2.801 to 10.8937 percent of employee wages, up to a $8,750 maximum per employee. In 2014, new employers make a fixed 3.6785 percent contribution, while new construction employers use a 10.1947 percent rate.

The Pennsylvania Department of Labor and Industry notes that for employee SUI contributions, there is no maximum amount of wages that can be taxed. An employee pays the SUI tax on all applicable wages, although the employer only makes a contribution based on each employee's wages up to $8,750. Payroll Taxes notes that the maximum SUI taxable wage base per employee in Pennsylvania increases by $250 per employee every year until 2018, when the amount reaches $10,000. As of 2014, if an employer fails to make the SUI contribution payments on time, the employer is subject to a non-negotiable, 3-percent late fee on all SUI tax payments due for that specific tax year.

According to Temple University, certain out-of-state employees who work in Pennsylvania may not be required to pay the PA SUI tax. Temple University notes that Pennsylvania has a reciprocal agreement in place with six states: New Jersey, Ohio, Indiana, Maryland, Virginia and West Virginia. This agreement allows residents of any of these six states to work in Pennsylvania without paying the state SUI tax. An employee who works in Pennsylvania but resides in a reciprocal state may be required to complete tax-withholding forms and pay SUI taxes to his resident state.

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