Everyone’s heard the saying, “you scratch my back, I’ll scratch yours.” In payroll, when these agreements happen between states, we call them reciprocal agreements. In other words, “you take my tax, I’ll take yours.”
Opening an office in a new state is an exciting milestone—but it inevitably comes with a number of compliance hurdles. Arguably the most important of these—at least to your employees—is compensation. Many states have their own unique set of guidelines and regulations around payroll and taxation, so it’s important to be aware of these as you begin to hire or relocate employees to your new office location.