Amount of Collateral
The collateral deposit must be one percent (1%) of the employer's most recent four calendar quarters of taxable wages prior to the date of election of the reimbursable status. If the employer did not pay wages throughout the specific four calendar quarters, the employer has a choice of three options:
- allow UCTS to establish the amount of the collateral deposit;
- multiply the number of employees to be hired in a 12-month period by the taxable wage limit and multiply by 1%;
- estimate the taxable earning of each employee and multiply the total by 1%. (This option is possible only if there is reasonable assurance of the earnings of each employee.)
Acceptable Collateral
The only acceptable forms of collateral deposit for a reimbursable employer are a surety bond or cash.
Requirements of Collateral
A collateral bond must be the original surety bond. The surety bond ensures repayment of UC benefits paid to eligible claimants whose base year wages were paid during the period of the bond. The customary term of a surety bond is 48 months. A surety bond with the accompanying Power-of-Attorney must be issued by an approved bonding company. A surety bond cannot replace other forms of collateral unless the collateral to be replaced is held along with the bond for a period of 2-1/2 years beyond the effective date of the bond.
Please submit your reimbursable election and collateral by accessing your employer self-service portal at www.uctax.pa.gov then selecting the Submit/Update Election option under Reimbursable Financing Method. If you are unable to submit the election electronically, you may mail the Form UC-1692, election of Re-election of Reimbursement and collateral to the Office of Unemployment Compensation Tax Services, PO Box 68568, Harrisburg, PA 17106-8568. If mailing payment, please make it payable to the "Pennsylvania Unemployment Compensation Fund" (PA UC Fund) and include your UC account number and the word "Collateral" on your remittance payment.
NOTE: If paying by check under the payment option you will be required to "Print Payment Voucher" and continue by following the prompts.
Also, a copy of your organizations 501(c)(3) federal exemption letter must be submitted if you elect the reimbursable method.
A newly liable non-profit employer may elect the reimbursable financing method within 30 days of the mailing date of their initial contribution rate notice. If the election is not received within the 30 day time period, a request to be reimbursable must be received by December 1 to be eligible to be reimbursable effective January 1 of the following year.
All collateral bond or deposits will be reviewed every four years (48 months) to ensure compliance with statutory requirements.
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