Employers should be aware of the extra legal and payroll obligations that a remote workforce creates, payroll professionals and consultants said May 12.
Some additional payroll obligations include state and local taxes, expense reimbursements, and business registration.
Employers should determine a remote employee’s tax obligations in a new jurisdiction or state, said Mindy Mayo, a managing director for KPMG LLP. Municipalities may create a new local payroll or income tax that affects remote employees to increase their revenues.
“You really need to research what other taxes you are going to be subject to when you go in a jurisdiction,” she said. “Are they going to have disability? Are the employees aware they may have disability withholding? Are you going to be tripping local and city municipality taxes?”
Some localities may have school district taxes that need to be withheld from a remote employee’s paycheck, she said. Seventeen states allow municipalities to levy their own income taxes in addition to state income taxes.
Employers should also employees of any loss of benefits that may occur by working in another state, added Rebecca Harshberger, the payroll tax vice president and practice lead for Entertainment Partners. Some employees may lose benefits, for example, by moving to...
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