US Domestic Wage Allocation

Does your organization offer your employees flexible work arrangements (e.g., hybrid and remote options)? Do you have employees who travel regularly for business? Are you struggling to manage the tax withholdings associated with those arrangements and activities? KPMG US 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 that enables employees to track their work locations and in order to prepare wage allocation reporting.

The US Domestic Wage Allocation solution connects Workday HCM demographics data, KPMG LINK Business Traveler, and your third-party payroll system to accurately report payroll allocations based on your employees’ actual work locations. If your organization uses Workday HCM, our U.S. Domestic Wage Allocation solution will help you ensure employee state tax reporting compliance. The solution is designed for employers with 50 or more U.S. domestic business travelers and/or hybrid workers and can be set up within weeks. US Domestic Wage Allocation is a Workday and KPMG joint solution that requires Workday HCM and KPMG LINK Business Traveler and is designed for employers with 50 or more US domestic business travelers and/or hybrid workers.”

When the pandemic hit, a Fortune 500 pharmaceutical company had to manage people working from home and elsewhere rather than from their usual office location, as new state tax rules continued to come out regularly (e.g., NY telecommuting rules). Luckily, the company already had a working solution leveraging Workday and KPMG’s global mobility technology (KPMG LINK), which tracked employee travel and which incorporated the complex US state tax and payroll rules for accurate reporting and withholding. The company was able to scale this existing solution without additional development to include flexible work arrangements added for its workforce during and postpandemic. 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.