How to Register a Business in Pennsylvania

This guide will walk you through the steps to legally establish your business in Pennsylvania state, from choosing a business structure to obtaining necessary permits and licenses.

1. Key Steps for Business Registration in Pennsylvania

Pennsylvania tax agencies

• Pennsylvania Department of Revenue (DOR) – withholding tax
• Pennsylvania Unemployment Contribution (UC) Fund – unemployment tax
• Various local agencies – local taxes
• Workers Compensation

2. Registration Steps

2.1 Choose a Business Structure

The first step is choosing your business structure. Here are the main options:

• Sole Proprietorship
  Simplest structure for single-owner businesses
• Partnership
  For businesses with multiple owners
• LLC (Limited Liability Company)
  Combines benefits of corporations and partnerships
• Corporation
  More complex structure with shares and shareholders

The structure you choose will determine your registration requirements with the Department of Revenue (DOR) and other agencies.

2.2 Register for both withholding tax and unemployment

i. PA Withholding Tax (State Level)

• You can register online from myPATH (Pennsylvania Tax Hub). Select “Register a New Business” and follow the prompts to register for Employer Withholding Tax.
• You will receive a PA Employer Identification Number (PA EIN) upon successful registration.

ii. Local Earned Income Tax Withholding (Local Level)

Pennsylvania has a local earned income tax (EIT), which employers must withhold based on the employee’s work location.

• Find the correct local tax collector using the PA Municipal Statistics Website.
• Register with the appropriate Tax Collection District (TCD) through the Act 32 system.

iii. PA Unemployment Compensation (UC) Tax

You must register for PA Unemployment Compensation (UC) Tax if you meet any of these conditions:

• You have employees working in Pennsylvania.
• You pay wages of $1,500 or more in a quarter, or you employ at least one worker for 20 different weeks in a calendar year.
• You are a corporation, LLC, sole proprietorship, partnership, or nonprofit organization with employees.
• You can register online through UCMS (Unemployment Compensation Management System). Select "Register as an Employer" and follow the steps. You will be asked to:
  • Provide business details (name, EIN, address, type of business)
  • Enter ownership structure (corporation, LLC, sole proprietor, etc.)
  • List employee details and payroll information
• Once registered, you'll receive a UC Account Number for filing and paying unemployment taxes. Note that it may take several weeks to receive your account numbers and company-specific unemployment rate—consider this timing when planning your first payroll.

2.3 Register for Workers Compensation

Employers with one or more employees must carry workers’ compensation insurance. Specific exemptions exist, such as for some licensed professionals, domestic workers, and more.

Purchase insurance from a commercial provider through Pennsylvania’s state fund or self-insure if approved. Please visit Pennsylvania Department of Labor and Industry for more information.