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Effects of Remote Work on Employer Payroll Taxes and Expense Reimbursements

by Jenn McCabe

COVID-19 has turned the country upside down as many businesses and employees embrace the “new normal”. Businesses that have been fortunate to setup successful remote work options are now considering it as a permanent alternative. Employees can live and work from anywhere; it’s no longer required for them to be near their workplace. However, with this changed work environment comes a cost and lots of questions. Do you allow your employees to work from any location? This would require you to establish a payroll nexus, state and city tax and licensing in multiple states where employees now work from home.

Other considerations when deciding on remote work options for employees is expense reimbursements. What does this entail? Here is a short list of things to consider:

  • Equipment
  • Ergonomics
  • Office Supplies
  • Cell phone reimbursements
  • Internet reimbursements
  • Electric bill

Are you responsible for these costs? If so, how much? Are the reimbursements taxable or non-taxable? Employers have some big decisions to make. Let us be your guide as you navigate these complex issues. Contact our HR Experts!

June 26, 2020

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Jenn McCabe - Partner, Outsource HR - El Segundo CA | Armanino
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