PAU on a W-2 is shorthand for Pennsylvania Unemployment, the amount your employer withheld from your paychecks during the year for the state’s unemployment compensation fund. For 2026, the rate is 0.07% of your gross wages with no cap, which works out to about 70 cents for every $1,000 you earn. It’s a mandatory employee contribution, and it qualifies as a deductible state tax if you itemize.
What PAU Means
Pennsylvania is one of a small group of states that requires employees, not just employers, to contribute to the unemployment insurance system. Your employer takes a fixed percentage out of each paycheck and sends it to the state’s unemployment compensation fund on your behalf.1Commonwealth of Pennsylvania Department of Labor and Industry. Yearly Tax Highlights
The label on your W-2 depends on the payroll software your employer uses. You might see PAU, PA SUI, PA UC, or SUT. They all mean the same thing: the employee share of Pennsylvania unemployment tax.
Where to Find PAU on the 2026 W-2
PAU almost always appears in Box 14, the catch-all section for tax information that doesn’t fit the standard numbered boxes. For 2026, the IRS split Box 14 into two parts. Box 14a is labeled “Other” and is where your PAU amount will show up with its identifying label next to it. Box 14b is reserved for Treasury Tipped Occupation Codes and won’t carry this withholding.2Internal Revenue Service. General Instructions for Forms W-2 and W-3 (2026)
Some employers report the Pennsylvania unemployment withholding in Boxes 15 through 20 instead, which cover state and local tax information. If nothing is in Box 14a, scan those boxes before contacting payroll.
The 2026 Rate and Checking the Math
For calendar year 2026, every Pennsylvania employee pays 0.07% of gross wages into the unemployment compensation fund. Someone earning $60,000 pays roughly $42 across the year.1Commonwealth of Pennsylvania Department of Labor and Industry. Yearly Tax Highlights
One detail catches people off guard: the employee portion has no wage cap. Your employer stops paying the employer side of UC tax after the first $10,000 of your wages, but the 0.07% on your side applies to every dollar you earn, no ceiling.1Commonwealth of Pennsylvania Department of Labor and Industry. Yearly Tax Highlights
To verify your own figure, multiply your total gross wages (shown in Box 3 or Box 5, or on your final pay stub) by 0.0007. The result should match your PAU amount within a few cents. Small rounding differences are normal.
How to Enter PAU in Tax Software
When your software asks for Box 14 information, type the label exactly as it appears on your W-2 (PAU, PA SUI, SUT, or whatever your employer used) in the description field, then enter the dollar amount. The software will prompt you to pick a category from a dropdown.
Choose “Pennsylvania state unemployment compensation” or “PA SUI” if that option exists. Otherwise, pick a general category like “state unemployment tax” or “other mandatory state tax.” The right category tells the program to route the amount to the correct line on your Pennsylvania return and to treat it as a deductible state tax for federal purposes.
Don’t enter the same amount twice. If PAU appears in Box 14a and a similar figure shows up in Box 19, your employer used one of the two boxes to report the tax, not both. Match either figure against the year-end total on your last pay stub to confirm which one is the UC withholding.
Is PAU Deductible on Your Federal Return?
Yes, if you itemize. The IRS allows employees to deduct mandatory contributions to state benefit funds that protect against wage loss, which includes required payments to state unemployment insurance programs. PAU goes on Schedule A as part of your state and local tax (SALT) total.3Internal Revenue Service. Topic No. 503, Deductible Taxes
The 2026 SALT cap is $40,000 for most filing statuses, with a 1% inflation adjustment that brings the effective limit to $40,400 ($20,200 for married filing separately). Filers with modified adjusted gross income above $505,000 ($252,500 married filing separately) face a reduced cap, which cannot drop below $10,000.3Internal Revenue Service. Topic No. 503, Deductible Taxes
Honestly, the PAU figure on most W-2s is too small to swing an itemization decision on its own. Someone earning $80,000 pays about $56 for the year. But it still adds to your SALT total alongside state income tax, local earned income tax, and property taxes, so enter it correctly.
What to Do if the Amount Looks Wrong
If your check against the 0.0007 formula shows a significant gap, start with your payroll department. The usual causes are a payroll system error in the gross wages used for the calculation, or a mid-year rate change. Your employer can issue a corrected W-2 (Form W-2c) if the reported withholding was wrong.
If your employer withheld more than the correct amount and won’t fix it, the Pennsylvania Department of Labor and Industry handles disputes over UC contributions through its UC tax office. That agency ultimately receives and accounts for the employee contributions, so it’s the most reliable place to escalate.4Commonwealth of Pennsylvania. UC Tax