Scranton
Scranton's Payroll Preparation Tax is 0.2787% of the payroll expense tied to days employees conduct business in the City. The employer pays it quarterly, and it can never be deducted from employee wages. It has been in effect since January 1, 2022, replacing the City's business privilege and mercantile taxes. Pennsylvania taxes residential and commercial cleaning at the 6% state rate, with no local add-on listed for Lackawanna County.
Most of what's local about a Scranton cleaning company's books runs through payroll. This page covers the Payroll Preparation Tax, what the City's budget shows about the wage tax, the Local Services Tax and its quarterly dates, sales tax on cleaning, and what all of it means for your books. Statewide payroll registration and the employee test are on my Pennsylvania page.
The City of Scranton's Payroll Prep Tax page puts the rate at 0.2787% of total payroll expense attributable to the days employees conduct business in the City. It's levied on employers, never deductible from employee wages, and paid quarterly, and Berkheimer administers it for the City. The page names governmental entities and purely public charities as exempt and lists no small-employer threshold; whether one exists isn't covered here.
The tax replaced the City's business privilege and mercantile taxes, which were repealed. The Single Tax Office says the City and School District no longer assess current-year business privilege and mercantile tax, and that it collects only delinquent amounts through 2022.
On the wage tax, the City's 2026 Operating Budget, submitted October 31, 2025, carries a line labeled "CURR WAGE TX (2.4%)." That's a budget label, not a levy ordinance. The budget doesn't separate resident and nonresident rates, gives no rate for its nonresident line, and doesn't state the school district share or the collector, so this page doesn't give a total earned income tax rate for Scranton.
Source: City of Scranton, Payroll Prep Tax Information (FAQ revised 11.17.2022)
The Scranton Single Tax Office's site says the Local Services Tax went to $3.00 a week, or $156 a year, for 2015; from 2005 to 2014 it was $52, or $1.00 a week. The employer files and pays quarterly to the Single Tax Office, with due dates of April 30, July 31, October 31, and January 30. That page carries a 2016 copyright footer, so the $156 is stated as of 2015 and hasn't been confirmed for the current year.
Source: Scranton Single Tax Office, Local Services Tax (2016 copyright footer)
Source: City of Scranton, Payroll Prep Tax Information (FAQ revised 11.17.2022)
Residential and commercial cleaning are both taxable in Pennsylvania, with no exceptions stated on the state's Business One-Stop Shop; any exclusions in 61 Pa. Code 60.1 are unconfirmed, because that regulation couldn't be retrieved from the official Pennsylvania Code site. The Department of Revenue lists local sales tax only for Allegheny County (1%) and Philadelphia (2%), so Lackawanna County has no local add-on listed and Scranton work sits at the 6% state rate as printed, with no effective date shown. Act 21 of 2026 moved local sales tax to destination sourcing, with enforcement from October 1, 2026, which matters only for taxable sales delivered into those two jurisdictions. My Pennsylvania sales tax page has the state detail.
Source: Pennsylvania Department of Revenue, Current Tax Rates
The Payroll Preparation Tax is the one that never shows on a pay stub. It isn't just a percentage of payroll. It's the slice of payroll tied to days your crews work in the City, it's an expense the company carries on its own, and it's a quarterly payment that has to agree with the payroll reports behind it. The Local Services Tax withheld from employees sits in a liability account until it's paid, and collected sales tax does the same, apart from income. 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 keep the Payroll Preparation Tax, the Local Services Tax, and any wage tax withheld on separate lines; how much of your payroll counts as City days, what rate applies to each employee, and how each return is 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 Scranton 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
In Scranton the Payroll Preparation Tax is the company's own expense, while the Local Services Tax is withheld from employees and held as a liability until it's paid. Keeping the two apart is what lets each quarterly payment agree with payroll. Book a short call below and walk me through your Scranton payroll.
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
Have Scranton crews and a Payroll Preparation Tax line you can't quite trace? Tell me how payroll runs now. The first conversation doesn't cost anything.
