work from home

Analysis

Employment tax and work from home survey

The future of remote working and impact on employment tax

What does the future of remote working look like? We surveyed hundreds of organizations and learned key insights on remote work policy, tracking and payroll practices, and strategy.

Work from home survey results

In early 2020, the COVID-19 pandemic created many remote workers almost overnight. In the months that have followed, companies have had to figure out what the future of remote working looks like. Which of these remote work situations should be temporary and which, if any, should be permanent? Short-term or long-term, remote work has significant employment tax and payroll reporting implications.

Nearly 300 organizations shared their reaction to the pandemic and COVID-19’s impact on their employment tax practices with us. The results revealed notable insights:

  • Remote work worked: A majority of the organizations believe that their workforce has been able to successfully work remotely and that their leadership teams can effectively manage remote workers. It remains to be seen whether that effectiveness will continue indefinitely.
  • Wait and see: There are significant differences between strategies that companies adopted in 2020 and their long-term plans.
  • Strategy is all across the board: There are no clear patterns for when employees may return to their offices, how organizations define remote workers, or how US remote workers may be different than international remote workers.

How does your organization stack up? Download the full work-from-home survey results and consider if you’re taking reasonable steps to successfully manage a remote workforce.

Remote work

The pandemic’s impact has not been the same for all organizations. Some provide services that can be delivered virtually, while others depend more on onsite activities or in-person interaction. Some had equipped employees to work remotely before the pandemic, while others focused primarily on in-office collaboration. Organizations should take stock of the pandemic’s impact, and how they’ve dealt with it, when thinking about their long-term remote work plan.

Remote employee taxes—tracking and payroll

Where an employee is physically located when working affects tax and regulatory employer obligations and policy strategies (e.g., compensation tiers). The expansion of remote work has increased flexibility for many individuals who can do their job anywhere with an internet connection. But it has also brought an increased administrative burden on many employers. Employer payroll tax and labor rules may require that employers track employee work locations, and related systems may need to be adjusted. Even working for a handful of days in a different tax jurisdiction can trigger new company compliance obligations. In the area of taxation alone, remote work has a widespread impact. Employment tax, corporate tax, credits and incentives, sales and use tax, and property taxes may all be affected.

Remote work strategy

Remote work means different things to different organizations. Each needs to chart its own path for incorporating it into its future plans. Organizations need to determine whether their remote work policy will be global or vary by location. If a company will have different strategies for temporary versus permanent remote work, they need to define “temporary” and align around how COVID-19–related exceptions interact and when those exceptions come to an end. They need to consider if and how compensation or benefits will change for a permanent remote worker. Setting a strategy may be a complex challenge, but it is also a vital one.

The future of remote working

The suddenness and severity of COVID-19’s impact on employers has led to the learn-as-we-go nature of remote work’s expansion. Our work-from-home survey results bore out this phenomenon, as organizational responses to a range of questions display a range of approaches. No matter where your organization may fall within these results and how it approaches remote work, Deloitte professionals can help with your remote work strategy, policy, and operations.

About this survey

  • Conducted in October and November 2020
  • 315 respondents from around the globe and a wide variety of industries
  • Company size of respondents ranged from less than 1,000 to greater than 50,000

 

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