US Domestic Wage Allocation

Managing Flexible Work Arrangements

Does your company find it challenging to manage flexible work activities, such as hybrid and remote work? The U.S. Domestic Wage Allocation is a structured solution to help manage tax and regulatory risks associated with domestic business travelers and hybrid workers. The solution streamlines the process of assessing multistate income tax withholding by providing an integrated online calendar and mobile app for employees to track their work locations. The data helps prepare wage allocation reporting for the employer.

U.S. companies provide flexible work arrangements as an employee perk, but these arrangements can be time-consuming and expensive to administer. Any organization that is looking to be compliant with U.S. multistate payroll income tax obligations, is presented with the U.S. Domestic Wage Allocation packaged solution, comprised of Workday HCM and integration to KPMG LINK Business Traveler. This solution helps assess worker/employer’s multistate income tax withholding by leveraging tax and regulatory logic, not held in Workday.

Case Study

During the pandemic, a Fortune 500 pharmaceutical firm had to manage employees working remotely or from other locations instead of their regular office; as new state tax rules continually change (e.g., NY telecommuting rules). Luckily, the company had a working solution leveraging Workday and the KPMG global mobility technology (KPMG LINK Business Traveler).

The company was able to scale this existing solution to include flexible work arrangements added for its workforce during and post pandemic. The solution tracks worked-in/lived-in locations for employees for business travel, remote work, and equity purposes, providing a greater level of tax precision and compliance.