Remote work has tax risks, talent opportunities
Workers are enjoying the opportunity to work remotely, but they may be overlooking some key tax factors.
The past year has proved to many employers that allowing many, if not all, of their employees to work from home has measurable benefits, but one of the risks is that employees and employers may not be reporting their taxes accurately.
Related: AICPA to remote workers: Check your state withholdings
Most remote workers have set up at kitchen tables and home offices, but a survey by Topia found that 28% have worked at least some days in a different state or even country since the pandemic began. Only a third have reported those days to their HR departments, which means that employers aren’t withholding the correct amount of tax for all their workers.
Topia also found that HR professionals themselves were more likely to work in a different state or country (42%), but also failed to fully report these days.
“HR leaders recognize that remote and distributed work offers a competitive edge for attracting and retaining talent, and for building diverse, highly-skilled teams,” Shawn Farshchi, CEO of Topia, said in a statement. “As flexible work becomes a mainstay of business culture and talent strategy, HR and finance leaders must collaborate to make it work from a compliance perspective. The potential advantages are too important to ignore.”
The flexibility to work remotely is important to employees; so important that they’re willing to submit to digital monitoring. Topia found that almost all employees — 94% — are willing to let their employers track their location to the country, state and city level, while 81% are comfortable with being tracked down to the street level.
The survey found that remote work capability is more important than professional development opportunities or company culture. The only thing more important is high pay.
Related: Giving your youngest remote workers the support they really need
In fact, the Topia survey found that what matters to employees has more to do with how they’re treated than what they’re given. Fifty-eight percent of workers said being trusted and empowered to do their best work is key to a great work experience. Nearly half cited training, job rotation or international assignments. Only 19% said “amazing office space and perks” were critical to a great employee experience, yet 25% of HR professionals say this is an important offering.
In the future, work teams will likely be more compatible with remote work, Topia found. The survey identified a slight increase in expectations around more diverse (including backgrounds and expertise) teams over the next five years. More significant changes were uncovered in expectations for teamwork happening across multiple locations (69% today, compared to 76% in five years), multiple time zones (59% compared to 67%) and in short term, project-based teams as opposed to long-term permanent teams (44% compared to 54%).
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