Doing business in multiple states and countries is a good thing — a sign of growth and expanding business opportunities. For multi state payroll departments, meeting the payroll tax requirements of the 50 US states and other territories can add risk, and an administrative burden. Audits and government enforcement is also on the rise, with states like Connecticut and New York using electronic audit methods to analyze transactional data in order to identify short-term business travelers who fail to pay their nonresident income tax.
Additionally, taxes for employees who are residents of one state and work in another is another potential compliance nightmare, requiring payroll teams to potentially navigate 54 different sets of filing rules. Failing to comply with multi-state payroll taxes are significant. It’s no wonder Bloomberg ranked this issue as among the top problems facing payroll professionals today.
Managing traveler payroll tax isn’t as simple as installing multi-state payroll tax software. Because employees can create tax liabilities every time they work in another state, payroll teams not only need to understand their own state’s regulations, but now must consider each state’s regulations.
Explosive growth in emerging markets has created a significant demand for employees to travel not just across the U.S., but around the globe – leading to increased exposure. Because cross-border transactions are becoming more frequent and more complex, it is critical for companies, from both a planning and compliance standpoint, to understand their obligations for withholding taxes and filing returns.
In many companies, the burden of complying with multi-state payroll tax sits on the shoulders of the payroll department. Combining Concur travel and expense data with intelligence from our partners on tax regulations can significantly ease that administration. Automated solutions from Monaeo, Blackspark and Permiso integrate directly with Concur, so travel and expense data are extracted and analyzed in real time. Multi-state and global tracking enables accurate compensation specific to state and international taxation and employer payroll obligations. What’s more, solutions are cloud-based so any changes to tax regulations are updated automatically in the system.
In addition to replacing cumbersome manual tasks, the automated solutions provide early alerts when employees are approaching key thresholds. Direct integration with Concur also enables analysis of current and past travel to identify high-risk areas- changing the way companies do business.
