Payroll Compliance for Business Travelers: What You Need To Know

Payroll Compliance for Business Travelers:
What You Need To Know

Presented by: Vic Arora CPA & Co-Founder, Blackspark

Our Presenter
Vic Arora, Co-Founder
Qualified as a Canadian Chartered Accountant in
1997 with Ernst & Young where he was a member
of the Human Capital practice.
Worked with clients on tax related aspects of employee movement
including coordination of tax compliance, compensation reporting,
and tax planning.
Co-founded Epoch Integration Inc. in 2001, an enterprise wireless
venture whose success led to its to acquisition by Blackberry (RIM)
in 2006.
Consultant to PricewaterhouseCoopers' International Assignment
Services practice
Co-Founded Blackspark Corporation.
©2011 Concur, all rights reserved. Concur is a registered trademark of Concur Technologies, Inc.

AGENDA
……
AGENDA
> Meet Blackspark
> Payroll Obligations and the Impact
> Beating Complexity through Integration and Automation


ABOUT BLACKSPARK
Based in Toronto, Ontario


THE PAIN
Employees create payroll obligations when they travel but…..
The payroll team has no idea:
when
where and
for how long they’re traveling


THE PAIN


AN EXAMPLE
John Smith:
lives in Texas and travels to California 24 days a year
annual salary is US$150,000, works 240 days a year.
Taxable in California for:
24 days/240 days x $150,000 = $15,000


California, Colorado, Massachusetts, Minnesota, New Jersey,
New York, and Pennsylvania (high audit activity)
States with personal income tax on non-residents
States with no personal income tax


WHY NOW?
Prolonged Recession
Easier to tax non-residents (non-voters!)

PLUS >

Better methods to analyze
transactions & identify who owes


WHY NOW?
Media Attention
Tax Firm Emphasis


How Big?
…..
HOW BIG?
…….

New York State: $4.9B (7% of budget)
BIG 4 example:
$1.3M annual U.S. exposure


COST OF NON-COMPLIANCE
NEW YORK STATE
1. Payment of withholding tax owing
PLUS
2. Penalties of up to 100% of withholding tax owing
PLUS
3. Interest


THE MISSION
Execute multi-jurisdictional payroll
each payroll period
across our entire employee population


THE ENEMY
Hard payroll cycle (TIME)
Varying regs by state (COMPLEXITY)


BEATING TIME
We need trip details ASAP to calculate workdays

Travel system
is the answer!

>

Data available in real time (as it is booked)
No need to harass travelers


BEATING TIME
ALSO:
Cancelations and itinerary changes
Connecting flights
Purpose of travel


BEATING COMPLEXITY
States with no tax
Reciprocity
Withholding required in state?
Technical & practical thresholds

STEP 1: STATES WITH NO TAX
States with no tax
If ONLY all states had no income tax!
Travel days in these states are treated as
workdays in the employee’s home state for
payroll purposes.


STEP 2: STATE TAX RECIPROCITY
Reciprocity
An agreement between individual states.
DEPENDENT on home state.
If applicable - travel days in these states are
treated as workdays in the employee’s
home state for payroll purposes.


STEP 3:CORPORATE NEXUS
Withholding required in state?
Employer requirements ONLY apply if
organization has payroll nexus in the state
If applicable - travel days in these states are
treated as workdays in the employee’s home
state for payroll purposes.


STEP 4: TECHNICAL & PRACTICAL
Technical & practical thresholds
Rules and regulations differ in EVERY state.
Blend of technical and practical is often a
good approach.


SOLUTION

Integrated via Concur App Center


OBJECTIVE
Help customers:
Save time
Automate manual processes to comply
Save money
Eliminate financial risk of penalties


WHAT IT DOES
Speaks to your Concur system
No manual processes

Delivers report each payroll period
Supports your existing payroll process


FLIP THE SWITCH
Rapid deployment by Concur Admin
No linking individual accounts

Syncs as employees book
Includes historical travel


WE CONFIGURE FOR YOU


NO CHANGE TO TRAVEL PROCESS


TRAVEL DATA FOR PAYROLL


TRAVELER SIGN OFF


TRAVELER SUPPORT


ANSWER DELIVERED

“An effective tool must be able to present a picture of exposure within five minutes of
looking at it. Out of all of the various products I had seen, only borderFile did that.”
-Cliffs Natural Resources

EXECUTION
ADP MULTI-JURISDICTION:
Supports multiple worked in states
Temporary configuration per payroll period
Data Import
Fields added to a .csv Pay Data Import File


INTERNATIONAL


FREE ANALYSIS OFFER

EXCLUSIVELY FOR CONCUR CLIENTS
Save over $2,500 by enrolling for a free analysis by November 1st!

Q&A


CONTACT US–
Concur.com/AppCenter
Vic Arora, CPA, CA
Co-Founder
varora@blacksparkcorp.com
855.667.7275 x701


RESOURCES
The New York Times – States Look Beyond Borders To Collect Owed Taxes:
http://www.nytimes.com/2010/03/22/business/22tax.html?pagewanted=all&_r=0
The Financial Times – Rise in mobility is a business risk:
http://www.ft.com/intl/cms/s/0/781bc3e0-5f25-11e2-8250-00144feab49a.html#axzz2Z6vGyYuO
CNNMoney – The business traveler tax threat:
http://money.cnn.com/2013/06/28/pf/taxes/business-traveler-tax-threat/index.html
2011 Deloitte Payroll Operations Survey:
http://www.deloitte.com/assets/DcomUnitedStates/Local%20Assets/Documents/us_consulting_DeloittePayrollSurveyResults_121611.pdf
EY T Magazine – A personal risk for corporate travelers:
http://tmagazine.ey.com/insights/a-personal-risk-corporate-travelers/
Webinar by Ceridian and the American Payroll Association focussed on this topic (this presentation was
followed up with in depth sessions held by the APA at this year’s Payroll Congress Conference):
http://www.ceridian.com/resources/webinars-ondemand/managing-state-income.html


Payroll Compliance for Business Travelers: What You Need To Know

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