Remote Workforces – Assessing the Benefits and Risks

As a result of the COVID-19 pandemic, and with the mandatory stay-at-home-orders enacted, companies had to create a remote working environment for many of their employees. Although some companies faced some initial obstacles such as technology issues, many of these issues were eventually resolved. The COVID-19 pandemic has shown that it is possible for people to work from anywhere and be productive doing more jobs than previously thought.

Throughout the past year, it has become increasingly clear that a significant portion of the workforce sees a benefit to working from home or any remote location. Such an arrangement goes by many names (remote working, working from anywhere, telecommuting, etc.), but the idea of not having to commute to an office has resonated with many employees. Employers are currently discussing the issue, developing policies and a framework for their employees to remain flexible and productive. The inherent risks, especially in terms of income and payroll tax compliance and reporting, cannot be ignored.

Tax Implications for Both the Employer and Employee

One of the most important aspects for a successful work from anywhere program is ensuring both the employer and employee are aware of their respective tax obligations. The migration to increased flexibility and adaptation of remote work has resulted in significant tax compliance issues for companies that need to be addressed, including:

  • State and Local Income Tax
  • Foreign Permanent Establishment Risk
  • Payroll Taxes
  • Tax Filings

Read more about these tax considerations in DHG’s recent Quarterly Global Mobility Services Newsletter.

As companies around the world invest valuable resources to create flexible workforce solutions, proactively addressing the tax issues that arise at the company and employee level must be a top priority. For many companies this is a new challenge that will require the assistance of professionals with experience in navigating through complexities of multi-jurisdiction employment.

Global mobility professionals are uniquely qualified to help with designing and implementing the compliance and reporting aspects of today’s remote working environment to mitigate risk and support both the company and its employees.

About Dixon Hughes Goodman LLP

DHG is a leading professional services firm offering assurance, tax and advisory services to clients nationwide and internationally. Our strength lies in our technical knowledge, industry intelligence and future focused approach combined with our drive to help our clients achieve their goals, both today and tomorrow. DHG’s professionals are passionate about providing an unparalleled client experience as we listen, innovate and act to help our clients.

DHG ranks among the top 20 professional services firms in the nation, providing assurance, tax, and advisory services. With more than 2,000 professionals across the United States, the DHG team serves clients in 50 states and internationally.