Employer UC Services  > Reimbursable Employers > Collateral Deposits

Collateral Deposits

Most section 501(c)(3) nonprofit employers electing reimbursable coverage must submit a collateral deposit with their application to the Office of UC Tax Services (UCTS). Political subdivisions are not required to submit a collateral deposit.

Amount of Collateral Deposit

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 Deposits

The only acceptable forms of collateral deposits for reimbursable employers are a surety bond or cash.

Requirements of Collateral Deposits

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 2½ years beyond the effective date of the bond.
To submit a cash deposit, login to UCMS and select "Make a Payment" from the left navigation bar. Select "Pre-payment," and then enter the amount of the collateral. Payment options are ACH Debit, ACH Credit, Credit Card or Check. Select a payment option and follow the prompts to complete the payment.
NOTE: If paying by check under the payment option you will be required to "Print Payment Voucher" and continue by following the prompts.
All collateral bond or deposits will be reviewed every four years (48 months) to ensure compliance with statutory requirements.
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