Multi-State Payroll Checklist
As remote work expands, many small businesses now employ people across multiple states. Each state has its own payroll rules – from tax accounts to wage laws – and missing a step can quickly lead to compliance headaches. This Multi-State Payroll Checklist will guide you through the essentials of managing payroll across state lines. You can also download the printable PDF version.
Step 1 – Register in Each State
- Set up state income tax withholding accounts.
- Register for state unemployment insurance (SUI/SUTA).
- Confirm any local city/county payroll tax requirements.
Step 2 – Track Tax Deposit Schedules
- Each state has unique deposit frequencies (monthly, quarterly, etc.).
- Use a payroll calendar to avoid missed deadlines.
- Automate deposits where possible.
Step 3 – Follow State Wage & Hour Laws
- Minimum wage rates vary by state (and sometimes by city).
- Overtime thresholds may differ (e.g., California daily overtime rules).
- Track mandated meal/rest breaks where required.
Step 4 – Manage Employee Residency & Nexus
- Tax withholding is typically based on employee’s work location.
- Some states have reciprocal agreements (e.g., Pennsylvania & New Jersey).
- Watch for nexus triggers if employees create a taxable presence.
Step 5 – Reconcile Multi-State Filings
- File quarterly state payroll returns (along with federal Form 941).
- Submit state unemployment insurance reports.
- Reconcile YTD totals for each state at year-end.
Download the Multi-State Payroll Checklist PDF
Get the printable version here: Download Multi-State Payroll Checklist PDF
FAQs
Do I need to register in every state where I have an employee?
Yes – most states require payroll registration if even one employee is working there.
What if an employee lives in one state but works in another?
You generally withhold taxes for the state of employment, but reciprocal agreements may change this.
Can payroll software handle multi-state compliance?
Yes, but you must still register accounts and provide accurate work location details.
Simplify multi-state payroll.
RemoteBooksOnline ensures payroll is managed consistently across states while keeping your books accurate and compliant. Get a free quote today.
Related Checklists
If you’re handling payroll for multiple states, you may also need our Payroll Tax Compliance Checklist and Payroll Recordkeeping Checklist
