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Payroll locations

How granular do you get when setting up tax locations, when setting them up in states with no local taxes?


  • If you asking (for example) I have employees in FL, which has no SIT and as far as I know no local taxes if I would establish more then one tax location for my FL employees the answer is no.

    HOWEVER, if you are asking if I have two (or ten) work places in FL, would I establish two (or ten) work places in the HRIS system, that is a different kettle of fish. You need to SOMEWHERE keep track of work place locations and keep it current. It is just not always for payroll reasons, and I do not like using the payroll system for anything not specific to payroll. I worked for one company where HR felt the need to keep track of the names of employees pets. Good for them, but that goes in the HRIS system, not my payroll system. Along with lunch orders, favorite colors and any thing else not specifically related to payroll.

  • Not the question, but work place in theory is a default to time accounting, which in theory should be overridable at the specific timesheet. Both systems talk to payroll, but neither systems are payroll (per se). Workplace is complicated because it is used for MANY different purposes, not all of which are payroll related. In a perfect world, payroll updates that field automatically if it is needed for something. But lets say Bob works in one week each month in 4 different states. Work location just became complicated. Tax location even more complicated, because you have to actually read the tax law specific to all involved states and not just count hours spent in each state. You do not want Tax Location (which is an external legal definition) considered synonymous with Workplace, which is just where the company considers Bob's primary work location to be. And many states do not care what the company thinks.

    You NEVER setup a Tax Location unless the law requires it. Workplace is what happens. If Bob is abducted by Martians and gets probed, that his workplace.

  • You will also need to track where you employees are physically located for multiple worksite reporting for those state which mandate such reports.

  • Easier to track actual workplace for everyone since non-payroll actors such as sales tax can also want to know who is working how many hours in their state Also, even for payroll purposes only, some states have a "boiling point" concept, such as "if your company works more then 1,000 hours per year in state, you have payroll nexus". No data can be implied as nexus.

  • This can get complicated if you have a transient workforce in many locations like the construction company I currently work for, we're in about 400 tax jurisdictions, including locals of course. We setup every project with a specific payroll tax code, including states with no personal income tax. It's not unusual for our employees in OH and PA to have 4 or 5 local taxes withheld on one paycheck. As David alluded to, the projects also include codes for sales tax. In each employees master data we have separate location codes used for different reporting requirements (e.g. Report of Organization). If your company is smaller and in very few payroll tax jurisdictions, this should be manageable, but in our case we subscribe to a 3rd party software provider which gives us regular updates for our payroll system. Hopefully you're company doesn't need to manage the local taxes, but if you do, I strongly suggest taking one of the APA Local tax courses. There are many inconsistencies across the local payroll tax landscape.

  • And if you have say traveling sales people who work in more then one state, you want (at least) to be able to known when and how many hours were worked in each state. That is not good enough for locals but I have never been too concerned about Mudville, OH auditors stopping by to see if we had any sales people pass through. State auditors have been known to do that.

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