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How to Pay Remote Employees

fredperrotta.com

11–20 of 82 posts

Re: How to Pay Remote Employees

#13
post #3

I was really hoping this would go into some of the tax implications as well. I was semi-recently denied a fully remote job because my state of residence would have caused the company to have a "sufficient physical presence" in the state, and meant that they would have to do a lot of extra work as well as paying extra sales taxes for sales in that state as well as setup the infrastructure to send the required taxes to…

They are going to pay sales tax for out of state sales soon.

Re: How to Pay Remote Employees

#14
post #3

I was really hoping this would go into some of the tax implications as well. I was semi-recently denied a fully remote job because my state of residence would have caused the company to have a "sufficient physical presence" in the state, and meant that they would have to do a lot of extra work as well as paying extra sales taxes for sales in that state as well as setup the infrastructure to send the required taxes to…

They are going to pay sales tax for out of state sales soon.

I get that this is a different trending article in HN right now, but we're talking about paying employees and the taxes required for income here.. not talking about selling products.

Re: How to Pay Remote Employees

#15
post #4
post #3

I was really hoping this would go into some of the tax implications as well. I was semi-recently denied a fully remote job because my state of residence would have caused the company to have a "sufficient physical presence" in the state, and meant that they would have to do a lot of extra work as well as paying extra sales taxes for sales in that state as well as setup the infrastructure to send the required taxes to…

Why not mention the state? You should contact your state representative (not member of Congress) and state senator (not US Senator) and let them know that you were denied a well-paying job because of the onerous standards your state has for remote work. They might be inclined to change it.

I actually thought I did (it's Florida by the way)...

I want to be clear, that I don't blame the state in the slightest. I honestly feel that companies should have to pay taxes where they operate regardless of how many employees live there, but what sucks is that a lot of states have difficult tax codes, esoteric and difficult ways of sending taxes in, have varying laws that make it extremely hard to follow the law unless you are a lawyer familiar with that area, and often won't help you if you need it.

I also don't really blame the company. I still feel like I would have been more than worth the extra hassle, but they aren't sure. And if they can avoid having to pay taxes in that state by not hiring me, and that can provide them a material benefit, then I'd probably do the same as them if I were in their position.

Re: How to Pay Remote Employees

#16
post #14

Earlier quoted context omitted.

They are going to pay sales tax for out of state sales soon.

I get that this is a different trending article in HN right now, but we're talking about paying employees and the taxes required for income here.. not talking about selling products.

No he's right, and that's what I was talking about too.

As far as I can tell (i'm not an accountant), a tax nexus mainly applies to sales made in that state, and sales tax that has to be collected and paid.

Income tax is a whole other beast, and I need to ensure I would be paying that if it was needed (Florida, my state, doesn't have any, so I don't need to worry about that).

Re: How to Pay Remote Employees

#17
Most payroll processors handle this for you. HR and Payroll for teams under 50 should never be done in house, there are so many pitfalls. IMHO, until you can hire a full time HR person, use a company to process/collect taxes, handle on boarding paperwork, and your employee handbook. ADP, Zenefits, etc.. can provide what you need to get started. You can always go internal later on once you are setup and learn the risks. Payroll is like dental work, its best to trust a professional that isn't you.

Re: How to Pay Remote Employees

#19
post #3

I was really hoping this would go into some of the tax implications as well. I was semi-recently denied a fully remote job because my state of residence would have caused the company to have a "sufficient physical presence" in the state, and meant that they would have to do a lot of extra work as well as paying extra sales taxes for sales in that state as well as setup the infrastructure to send the required taxes to…

That really sucks. It is a reality I see some of my clients facing too. I've wondered what would happen if you offered to work as a self-employed 1099 employee, or if you opened your own LLC. Does that employer offer health insurance? That's pretty much the only reason why someone would demand being a W2 employee in my mind. And there's lots of ways to get health insurance in this country.

I had other offers, so it wasn't a big deal in the end. But I've worked as a 1099 contractor before, and I'm not doing that again.

You say there's lots of ways to get health insurance in this country, but in my experience that's not the case. Not only is it vastly more expensive, but (not to get too political) I can't really rely on my ability to buy insurance as a single person at a reasonable rate to stay around.

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