How to Apply Annual Occupational and Local Services Tax Exemptions

Employees working in states with annual occupational or local services taxes (LSTs) may seek exemption, such as the Pennsylvania LST. If granted, they must provide you with their paperwork at the beginning of the calendar year.

Before processing the first payrolls of the year, you must capture these exemptions for your employees. For employees who have let their exemptions lapse, you must likewise update the tax card accordingly.

To specify these exemptions for multiple employees, use the HCM Data Loader.

Here's how you can specify these exemptions for individual employees.

1. Open the person's Tax Withholding card for editing.

2. Expand Regional, and review the following.

   • Exempt from LST

   • Exempt from City Tax

   • Exempt from School District Tax

3. If you need to make changes, click Edit.

4. Set a date for the change.

5. Make the required changes.

   Select Yes to apply the exemption.

   Select No to revoke the exemption.

6. Save and submit your changes.