Allentown
The City of Allentown's codified Business Taxes ordinance covers three local taxes: an earned income tax employers withhold, a Local Services Tax, and a Business Privilege Tax. It sets the City earned income tax at 1.35% for residents, the Local Services Tax at $52 a year, and the Business Privilege Tax at three mills, due April 15, but that compilation carries March 2013 page headers, and the School District's newer page lists a different nonresident rate. Pennsylvania taxes residential and commercial cleaning at the 6% state rate, with no local add-on listed for Lehigh County.
In Allentown the official sources don't all agree yet, so this page says where each figure comes from and how old it is. It covers the earned income tax and where the School District directs payments, the Local Services Tax and the Business Privilege Tax, sales tax on Allentown cleaning, and what it means for your books. Statewide payroll registration and the employee test are on my Pennsylvania page.
Article 331 of the City's Business Taxes ordinance, re-enacted under Act 32 with an effective date of January 1, 2012 in Section 331.09, sets the City earned income tax at 1.35% for residents. The compilation's running page headers read March 2013, so it's a dated text and not a current-year confirmation. Section 331.04 has employers withholding "the greater of the employee's resident tax or the employee's nonresident tax."
The Allentown School District's taxes page, published October 20, 2026, lists 1.975% for residents and 1.28% for nonresidents. It doesn't say whether the resident figure includes the City's share, and its nonresident figure doesn't match the older ordinance text, so this page doesn't treat the ordinance's nonresident rate as current. The School District's EIT section directs EIT payments and forms to Berkheimer. Which rate applies to a given employee is a question for your CPA.
The same compilation sets the Local Services Tax at $52 per year, with a $12,000 exemption in Section 336.03(A). It sets the Business Privilege Tax at three mills, with the return and tax due on April 15 of each year. The City's Business Privilege Tax web page states no rate and no due date, so both figures rest on the March 2013 text. This page doesn't cover who collects the Local Services Tax or who qualifies for the exemption.
Pennsylvania taxes both residential and commercial cleaning, and the state's Business One-Stop Shop states no exceptions. The governing regulation, 61 Pa. Code 60.1, couldn't be retrieved from the official Pennsylvania Code site, so any exclusions in it are unconfirmed. The Department of Revenue's rate table prints the 6% state rate and lists local sales tax only for Allegheny County and Philadelphia, which leaves no local add-on listed for Lehigh County; it prints no Allentown combined figure and no effective date. Act 21 of 2026 moved local sales tax to destination sourcing, enforced from October 1, 2026, and that matters only for taxable sales delivered into Allegheny County or Philadelphia. The rest is on my Pennsylvania sales tax page.
Source: Pennsylvania Department of Revenue, Current Tax Rates
Withheld earned income tax goes to a liability account of its own, apart from Pennsylvania withholding, and the Local Services Tax gets a separate line. When two official sources disagree on a rate, I don't let a payroll setting run on an assumption; I'd rather test it against a couple of real paychecks once your CPA confirms the rate, and keep a note of what was checked and when. The Business Privilege Tax comes with its own return and an April 15 due date, so it gets an expense line and a calendar entry. Collected sales tax sits as a liability, never in income, and payroll is recorded at the wage actually paid, as my payroll page explains.
I'm a bookkeeper, not a CPA or an Enrolled Agent. I record each Allentown tax where it belongs; which earned income tax rate applies to each employee, whether anyone qualifies for the Local Services Tax exemption, and how each return gets filed are questions for your CPA.
Rules checked against the sources above as of October 20, 2026. Rates and rules change; confirm current figures with the agency or your CPA.
About Figure Eight Financial
Figure Eight Financial is Dave Gordon’s bookkeeping practice for residential and commercial cleaning companies. I work with owners in Allentown and across the country, and I’m a Certified QuickBooks Online ProAdvisor.
Before bookkeeping I studied computer science at Penn State and spent a career at IBM as an engineer, so I build the books as a system: data comes in once, lands in the right place, and ties back to a statement. I’m a bookkeeper, not a CPA or Enrolled Agent. I keep the books your CPA works from, and the tax decisions stay with your CPA.
Credentials and memberships reported by Figure Eight Financial.
More about DaveHow I Help
Allentown's earned income tax, Local Services Tax, and Business Privilege Tax each get their own place in the books, with withheld amounts held as liabilities until they're paid. Collected sales tax stays out of income as well. Book a short call below and tell me how your Allentown payroll is set up.
The core service. Transactions recorded and categorized, every account reconciled so the books and the bank agree, and monthly reports that arrive explained, split by residential and commercial and sliceable per contract.
The full picture of how this works for a cleaning companyFor the months where nothing got entered at all. I fill in the missing periods from the ground up, pulling bank feeds, statements, and receipts until every month has a complete set of records.
How catch-up bookkeeping worksFor books that exist but can’t be trusted. I audit what’s there, fix the unreconciled accounts, duplicate transactions, and wrong categories, and tie every balance back to a statement.
How cleanup bookkeeping worksYour crews paid on time, every pay period, with each payroll run recorded in the books so labor shows up against the jobs it belongs to.
How payroll worksRecurring invoices that match your contracts, an aging report you can trust, and follow-up on slow payers handled by a process instead of your evenings. Built for net-60 commercial accounts.
How invoicing and receivables workA file built right for a cleaning company from day one, or rebuilt after the DIY version drifts, and then I teach you to run it. I’m a Certified QuickBooks Online ProAdvisor, and this is honestly my favorite part of the job.
How a proper setup worksWe start with a short call about your business and where the books stand. The first conversation doesn’t cost anything.
I take a look at what you’ve got, your QuickBooks file, your spreadsheet, whatever exists.
You get a written proposal with the price, so the decision is yours with the number in hand.
Let's Connect
Running Allentown payroll and not sure which rate your system is using? Send me a recent pay stub and I'll show you where each tax lands in the books. The first conversation doesn't cost anything.
