A Primer for Your Company’s Remote Employees and State Taxes

Amidst the rapidly changing market trends, organisations and their workforce are encountering fresh challenges. The conventional work setting has undergone a significant shift, and Works recognises this new reality with innovative technology empowering businesses to streamline their processes and leverage operational efficiency which stands to benefit them over their competitors.

The current climate presents an unparalleled prospect for employers and employees alike. The internet’s expansion has paved the way for remote work, offering the freedom to operate from anywhere globally. Additionally, there is a burgeoning need for industry experts in various sectors as businesses are increasingly eager to bring them aboard.

Despite an increasing number of firms accepting remote work’s benefits, there are still multiple hurdles to overcome. This write-up aims to offer comprehensive insights and solutions to commonly asked questions surrounding the shift, including: Are you prepared to embrace these changes? Are you comfortable with the modern world? Our detailed responses aim to help you comprehend the implications of these transformations.

  • Where can individuals search for telecommuting job opportunities?
  • What are the circumstances and reasons that make it beneficial for businesses to utilise remote employees?
  • What are the main challenges associated with collaborating with remote workforce?
  • What is the appropriate method for handling payroll taxes for remote staff?

Absolutely, let’s delve straight into this topic.

What are the Types of Work That Can be Carried Out Remotely?

Remote workers have the capacity to deliver the same output and work that traditional office employees do, irrespective of their location globally. These experts typically have various openings to work remotely in the following capacities:

  • Content producers;
  • Translators;
  • Academic writers from “write my essay” services;
  • Graphic designers and developers who work with images and code;
  • Developers, video game creators and software engineers.

Nonetheless, certain tasks can still be accomplished within the workplace without requiring specialist involvement. Currently, this kind of structure is gaining traction, with job functions such as marketing professionals, human resources managers, accountants and customer service associates frequently outsourced by companies.

Advantages of Collaborating with Remote Specialists

Undoubtedly, when businesses opt to source remote talent, they enable themselves to draw from a wider perspective of competent experts from across the globe. This offers the advantage of access to a greater pool of skilled professionals who can significantly benefit the company. Additionally, by expanding their hunt internationally, a business is more likely to hire the best-suited personnel for the job.

Organizations that adopt this methodology have a significant competitive advantage over their domestic rivals.

This type of work arrangement has several benefits, extending beyond access to a wider and more qualified candidate base.

Enhanced Efficiency.

As per a study highlighted in Harvard Business Review, remote employment is beneficial for both employers and employees.

Optimized Time Management.

Studies indicate that workers can potentially spend over eight hours per week on tasks that do not contribute directly to their job responsibilities. This is an ineffective use of resources and energy, and could be circumvented. Telecommuting could be an advantageous solution, as it aids in minimizing time wastage.

Cost Reductions in Business Environment.

Undoubtedly, for businesses, wages and payroll taxes are not the sole expenses to be factored in. There are a plethora of additional costs that are essential for effective business operations and can add up to thousands of pounds per employee annually. Fortunately, there are methods to curtail expenses, such as utilizing remote experts, which is an economical alternative.

Superior Memorization and Storage.

Hiring a new team member entails a considerable amount of time and energy. Therefore, it is reasonable that the expense of recruiting a new team member can be quite significant.

As per a recent study, remote staff members have a significantly higher chance of exhibiting loyalty towards their employers over an extended duration, provided they have the option to work remotely. This is a favourable outcome, as it has been demonstrated that granting employees the ability to work remotely has a discernible impact on employee retention rates, indicating that once given the chance to work remotely, team members are likely to remain in their positions for longer periods of time.

The benefits of implementing a telecommuting policy for your team are evident from the statistical data presented above. In contrast to traditional on-site working arrangements, remote staff members indicate a considerable growth of 29% in job satisfaction, explicitly indicating the prospective advantages for both employers and employees.

Managing State Tax Withholding is Among the Chief Obstacles of Remote Hiring.

Despite the numerous apparent benefits, several firms still seek reasons for not utilizing remote teams.

Concededly, building a remote work environment presents several significant challenges. One of the most pressing concerns is to locate skilled professionals. Furthermore, it is critical to identify efficacious methods of collaborating and communicating across disparate time zones.

Payment and taxation are significant issues of apprehension for numerous firms and individuals. The heterogeneity of approaches to taxation and payment techniques within and among countries and administrations indicates that this is a crucial issue that is hindering numerous people from accessing the internet.

If you share concerns about taxes and payments, our all-encompassing guide is available to provide assistance.

To commence, let us establish the three general categories in which the online labour force can be classified.


For companies aiming to run commercial operations, this is the most advantageous alternative. The most advantageous aspect of hiring independent contractors is that the business is not accountable for filing any tax returns on their behalf. To summarize, the business is devoid of any such responsibilities.

It is crucial to acknowledge that, while contracting with personnel can be the most advantageous form of employment for businesses, the legislation has explicit criteria for distinguishing between contractors and full-time employees. It is imperative to classify each contractor accurately; otherwise, a considerable tax penalty may be imposed.


This category of personnel is akin to the traditional staff members in a physical office. It is vital to hire a preferred specialist, just as you would if you were hiring someone for your team in a conventional workspace. The primary hurdle with this type of employee is that it usually entails establishing a new branch in the area where the expert is located.

In this scenario, taxation must align with the norms instituted by a specific jurisdiction.

Business Structure / Individual Enterprise

This paper introduces a simple method of procuring specialist external assistance. The underlying idea is that an expert individual will establish themselves as an independent contractor and deliver services to your organization, which you will then compensate for via invoicing.

Several firms choose this working approach due to its simplicity compared to hiring independent freelancers. Nonetheless, certain drawbacks are associated with this method and demand consideration.

Embarking on a business venture can pose a daunting task for numerous individuals. In certain countries, those attempting to initiate a business may find themselves wanting in resources to do so. For some, the expenses associated with initiating business operations and maintaining an active business license may be exorbitant, rendering the prospect of conducting business uninviting.

To prevent any legal infringements in the home countries of you and your employees, it is crucial to establish the exact nature of the relationship from the beginning.

Let us now discuss the practical details and tackle how to handle taxes.

In most cases, the geographic location of your tax expert will be the primary factor in determining the process you undertake to file your tax returns. While numerous tax laws are shared worldwide, the specific regulations that you need to adhere to might vary depending on your place of residence.

Managing Taxes for Global Employees

Several complications can emerge when attempting to recruit professionals from a foreign country.

Bear in mind that numerous countries may mandate setting up an official branch of your company in their jurisdiction to employ US citizens. Consequently, you must comply with the corresponding regulations of the specific country to legally hire individuals from the US.

Researching the employment regulations in the region is necessary, and creating your branch will take considerable time and effort.

Regrettably, the prospect of managing their own staff and handling associated taxes can be overwhelming for several organizations. Consequently, they choose to partner with independent contractors or freelancers who are responsible for any tax implications arising from their work and are obligated to complete the requisite paperwork accordingly.

Tax Processing for US Employees

Hiring foreign employees can be more arduous for businesses in the United States compared to many other nations, as taxation rates and regulations can exhibit notable variations amongst American states.

When hiring employees in the United States, payroll taxes and income taxes are the two primary tax implications to consider. However, each state has its own rules and tax rates for both types of taxes. Consequently, it is crucial to be aware of the relevant regulations and rates to ensure compliance and accurate tax payments.

If you run a business in California and are open to the possibility of hiring a designer from Arizona, it is probable that you will need to fill out the requisite tax forms and deposit the necessary funds with the Arizona Treasury Department.

Concluding Remarks

Both of these potential solutions to alleviate the issue are worth exploring. As earlier mentioned, outsourcing work to independent contractors could be a practical alternative, as it would negate the need to carry out the time-consuming task of payroll processing.

Regrettably, there may be instances when this alternative may not align with your specific requirements. It is crucial to note that your staff may need to undertake responsibilities beyond the scope of their contracted role at times. To efficiently handle any concerns, partnering with a dependable payroll service provider who can offer the required support is recommended.

Fortunately, you have come to the right place. Our Payroll team is responsible for processing payments for all employees hired through Works. To get in touch with us, kindly visit the appropriate page on our website.

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