Payroll Prep Tax Information

When the City of Scranton was declared a financially distressed municipality pursuant to the Municipalities Financial Recovery Act, Act 47 of 1987, as amended, (Act 47) it was authorized to levy a payroll preparation tax in lieu of the City’s business privilege tax and mercantile tax. On December 14, 2021, Scranton City Council adopted ordinance File of the Council No. 95 repealing the City of Scranton’s business privilege tax and mercantile tax and authorizing the levy of a payroll preparation tax to begin on January 1, 2022.

In the interest of assisting City’s businesses as they prepare their initial Payroll Preparation Tax return, Scranton City Council is considering a one-time waiver of the interest and penalties that would otherwise be due from June 1, 2022, through June 30, 2022. This, in practical terms, would extend the due date from May 31, 2022, to June 30, 2022, of a business’s initial Payroll Preparation Tax return. The City will continue to provide updates on this webpage.

WHAT IS THE PAYROLL PREPARATION TAX?
The Payroll Preparation Tax is a tax on the total payroll expense paid by an employer, including salaries, wages, net distributions, commissions, bonuses, stock options and all other compensation to all individuals who, during any tax year, conducts business activity in the City of Scranton.

WHAT IS THE PAYROLL PREPARATION TAX RATE?
The City of Scranton’s payroll preparation tax rate for tax year 2022 is 0.2787% or .002787.

WHEN IS THE PAYROLL PREPARATION TAX DUE?

An employer must make a quarterly tax payment on or before the following dates:
QUARTER DUE DATE
FIRST
MAY 31

SECOND
AUG 31

THIRD
NOV 30

FOURTH
FEB 28

HOW TO PAY THE PAYROLL PREPARATION TAX?
The City of Scranton has appointed Berkheimer Tax Innovations as its payroll preparation tax administrator. You must remit your check or money order to:
HAB-PPT
PO Box 21810
Lehigh Valley, PA 18002-1810

For more information, see:
Payroll Preparation Tax Ordinance
Payroll Expense Tax FAQs
Berkheimer Tax Innovations

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