Is there a legal requirement for employers to withhold local earned income tax and local services tax from payroll?

Yes. The Local Tax Enabling Act requires businesses with employees working in Pennsylvania to withhold the appropriate local earned income tax and Local Services Tax from payroll.

Note: the Tax Officer for the earned income tax and for the Local Services Tax sometimes differs. Determine the Tax Officer(s) in your workplace location taxing jurisdiction by accessing the Pennsylvania Department of Economic and Community Development Municipal Statistics