Here are the states where payroll is the most complicated

Processing payroll is always a little miserable, but moreso in some states than others…here’s where it’s hardest for employers

Have you ever wondered if life would be easier if you lived on a beach in Florida? Chances are it would be, in more ways than one if you handle payroll. That’s because Florida laws cause the least pain for employers, according to a state-by-state comparison by XpertHR.

Florida famously does not have state or local income tax, which can make the payroll process easier. And along with Tennessee and South Dakota, the state does not require employers to file a reconciliation return of wages paid and payroll taxes withheld. In those three states, companies also do not have to distribute any notices other than the Form W-2, nor is there disability insurance or workers’ compensation to worry about.

According to the analysis, the top states for payroll ease are:

  1. Tennessee
  2. Florida
  3. South Dakota
  4. Nevada, New Hampshire, Wyoming (tied)
  5. Alaska, Oklahoma (tied)

And some of the most difficult states for payroll are no surprise:

  1. California
  2. New York
  3. New Jersey
  4. Hawaii
  5. Maryland, Virginia (tied)

The states were rated based on criteria such as income tax, required forms, disability insurance, workers’ compensation, and any additional legally mandated administrative processes.

“Today’s employer has the distinction of being the nation’s central tax collector,” said Rena Pirsos, legal editor at XpertHR. “Many employers are overwhelmed by the complexity involved in managing employment-related tax and payroll compliance, but some state laws make the task even more burdensome than others.”


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