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Tax implications of working from home

Working unleashed: Optimizing your remote work infrastructure

The COVID-19 pandemic dramatically accelerated the shift to remote work arrangements. As you and your organization look to define your “next normal,” we are here to help. Deloitte’s experienced tax and human capital professionals and innovative technology solutions can support you. Together, we can align your strategy, policy, and operations to address the potential talent and tax implications of working from home or working anywhere.

Seamlessly transform how your employees work

Demand for remote work has been rising for years. But the global pandemic turned it from request to requirement almost overnight—and companies stepped up. Seventy-nine percent of respondents to a Deloitte survey¹ reported that at least 75 percent of their workforce has been able to work remotely during the COVID-19 pandemic. And 69 percent said their company’s ability to manage and support a remote workforce was good or excellent.

Your company’s workers are likely to have questions about going back into the office postpandemic. It may be time to stop thinking about “remote work,” “work from home,” and “telecommuting” as special categories. These ways of working may continue to be part of the norm. You need the right policies and infrastructure in place today to support them to take advantage of the benefits they present.

Seamlessly transform how your employees work

Variation Guidelines Compliance

Meeting your demand

Sixty-six percent of survey¹ respondents said they will allow more flexibility when it comes to remote work after the pandemic ends. Doing so requires your company to track where employees are working today and where they want to work in the future. Your processes need to accommodate an array of remote working arrangements, such as permanent remote requests, hybrid schedules, and even workers who may want to regularly change locations.

Establishing your rules

Requests will likely be coming from all parts of your organization: the sales professional who’s constantly on the go; the marketing manager leading a team; the IT associate providing tech support. Requests from different departments—even different levels of individuals—need to be evaluated individually based on their potential impact on the organization as a whole.

Satisfying your obligations

The potential talent and tax implications of remote work can be significant. Employees working in new states or countries may trigger certain payroll registration or employment tax withholding requirements. Time spent traveling to an office for a meeting may need to be accounted for differently. Employees working in different states or countries may also affect the company’s corporate tax obligations. Going from a few offices to a swath of homes makes state taxation of telecommuters and corporate compliance more complex.

Taking on the potential talent and tax implications of remote work

Deloitte can help your organization evaluate and establish temporary and future remote work programs. We can help analyze your current remote workforce approaches—including those implemented rapidly in response to COVID-19. We can also help your organization develop and execute a future-forward remote work strategy that aligns with business objectives: Employees may benefit from increasing their well-being, job satisfaction, and work-life balance, and the business benefits from lowering overhead costs and becoming more attractive to top talent. We do this through the three major components of our remote work approach:

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Strategy

Chart a long-term remote work plan that most effectively helps your workers thrive. Every company’s strategy is custom-built based on their industry, global footprint, talent needs, and company culture. Key questions include:

• How important is “physical workspace” to your company culture?

• Is remote work an option for you based on the culture you want in your organization and your vision for the future?

• Which roles are you willing to make remote?

• What are you willing to do to sustain high-performance teams in a virtual environment?

• What support would your remote workers need, and how much support is the organization able to provide?

Policy

Enable your strategy by establishing a policy or guidelines. Your remote work policy or guidelines address eligibility requirements, benefits and entitlements, compliance practices, expense management, and other related issues. It will help address considerations such as:

• Which roles and seniority levels will have remote work options?

• How will compensation and benefits change for a remote worker?

• How can the company limit risk exposure and adhere to regulatory and tax compliance guidelines?

Operations

Bring your strategy and policy to life. Your remote work operational plan addresses how you will implement this change in your organization, as well as how you will provide ongoing administration of your remote work strategy and policy. Key questions for operating a remote work program long-term include:

• Which function and team will own the remote work strategy and policy going forward?

• What roles do business and talent leaders, managers, and compliance functions play in approving remote work?

• How will your organization communicate with remote workers, managers and talent leaders on an ongoing basis?

• What changes need to be made to the larger talent and HR operations processes (e.g., onboarding, productivity, performance) to support remote workers and a dispersed workforce?

• What technology and tools does your organization need to effectively enable remote workers?

The intersection of talent and technology

Human insights, combined with cutting-edge technologies, can help you achieve the potential benefits of incorporating remote work arrangements into your organization. The process starts by identifying where your people are today, including allowing workers to preclear their desired work arrangement. Our proprietary, custom-built technology uses key employee and employer information to analyze remote work requests from various risk and cost analysis perspectives, enabling you to make informed decisions and determine if they fit the remote work plan your organization has developed.

The Deloitte difference

The way work is being done is rapidly changing. Over Deloitte’s 175-year history, we’ve helped our clients navigate ground-shifting changes.

Mobility is a capability.

We’re not new to the changing world of work. Deloitte’s Global Employer Services have long helped clients address the tax implications of remote work and navigate periods of disruption and uncertainty.

From “doing digital” to “being digital.”

During our three-year Tax in 2020 initiative, we doubled our investment in digital transformation. We focused our efforts on technology innovation to develop leading edge digital capabilities and cloud-based solutions. We also prioritized an integrated global platform that automates many of the cumbersome aspects of tax compliance.

Putting all of Deloitte to work for you.

Remote work is so much more than tax. Our tax and human capital specialists team together to deliver relevant research, analytics, and insights.

Keep reading about remote work

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Building a resilient global workforce strategy

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Navigating remote work compliance

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Remote work: The road to the future

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Moving to a Hybrid model? There could be some hidden costs

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Additional information and resources

References

¹ Deloitte Tax LLP, “2020 Impact of Remote Workers on Your Employment Tax Practices,” October 2020.

Get in touch

Jim Pickett

Principal | Deloitte LLP

jampickett@deloitte.com

+1 212 365 8095

Jim has more than 20 years of experience in Global Employment Services, with a particular focus on Mobility Tax. He specializes in cross-border tax planning and global taxation for expatriates and for... More

Lorraine E. Cohen

Partner | Deloitte Tax LLP

lcohen@deloitte.com

+1 415 783 6329

Lorraine is a partner in the Global Employment Services (GES) practice for Deloitte Tax LLP in San Francisco. She has more than 30 years of experience serving global companies including expatriate tax... More

Joel Eisenreich

Americas GES Rewards Practice Leader

jeisenreich@deloitte.com

+1 973 602 6185

Joel specializes in global compensation and benefit matters with a unique focus on cross-border tax and regulatory issues. Joel has been with Deloitte for more than 25 years and is the leader of the A... More

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Tax implications of working from home

Working unleashed: Optimizing your remote work infrastructure

Let’s make this work.

Enable remote work for your people

Seamlessly transform how your employees work

Meeting your demand

Establishing your rules

Satisfying your obligations

Taking on the potential talent and tax implications of remote work

The intersection of talent and technology

Let’s make this work.

The Deloitte difference

Mobility is a capability.

From “doing digital” to “being digital.”

Putting all of Deloitte to work for you.

Keep reading about remote work

Additional information and resources

References

Get in touch

Principal | Deloitte LLP

Partner | Deloitte Tax LLP

Americas GES Rewards Practice Leader

Recommendations