Payroll for Out of State Employees

May 31, 2019  

In our hyper-connected world, it’s becoming increasingly easy for both part-time and full-time employees to work remotely. As a result, a growing number of companies are hiring out of state employees. Yet, no matter how strategic this is when it comes to finding talented people — when it’s time to pay them their salaries — payroll can get quite complex.

Typically, payroll for out-of-state employees involves the following considerations:

  • Federal income tax: As an employer, you always withhold federal income tax for your employees.
  • State income tax: Some states have a state income tax, while others — like New Hampshire — don’t. As a rule of thumb, you have to withhold state income tax according to the location where the work was performed. So, if your company is based in Seattle, Washington, but your remote employee lives — and therefore works — in New York City, you have to withhold according to New York’s income tax rates and rules. This involves registering with the state’s tax authority, making deposits according to its schedule and staying up to date with any changes to the income tax tables.
  • Reciprocity: Some states have reciprocal agreements that prevent workers who live in one state and work in another from being required to submit a nonresident tax return. While this makes things easier for employees, it can make matters more complicated for employers that have employees living and working in multiple states with reciprocal agreements.
  • State unemployment tax: State unemployment tax (SUTA) laws and rates vary from state to state and can change frequently. As an employer, you’re required to register with the state unemployment agency where an employee resides and pay SUTA on his or her behalf. Of course, if you have multiple employees who each live in different states, you’ll have to register and pay in each one.
  • Local income tax: In some states, local governments where employees work require you — the employer — to pay a local income tax. This involves registering with the appropriate agencies, staying up to date on the tax rates and making sure you pay on time.

Clearly, payroll for remote employees can be extremely challenging — especially when your employees are located in multiple states and municipalities throughout the country. That’s why it’s advisable to outsource your payroll to a top-quality firm like BCM Payroll Services, Inc. We have years of experience in both in-state and out of state employee payroll, so you can trust us to handle yours — while you can concentrate on your core business.

Choose BCM Payroll Services for All Your Payroll Needs

At BCM Payroll Services, Inc., we’re dedicated to providing you with accurate, compliant and timely payroll services — both for in-state and remote employees. What’s more, our customer service is second to none, so you can always be sure of the very best support in the event you have questions or concerns.

Our confidence in our ability to deliver top-notch payroll services and customer support is backed by our five power promises. If we make a mistake or are slow to respond, we discount your next payroll processing fee by 50 percent or $50 — whichever is less. Moreover, if we’re to blame for a payroll tax penalty, we pay it. Plus, you can always submit your data the way you prefer, and we guarantee delivery of your payroll.

If you want to experience how simple and streamlined payroll can be — even for remote workers — call us at 717-264-7374 to schedule your FREE payroll checkup!

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