payroll compliance for business travelers: what you need to know

1. Payroll Compliance for Business Travelers: What You Need To Know Presented by: Vic Arora CPA & Co-Founder, Blackspark

2. 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.

3. AGENDA AGENDA > Meet Blackspark > Payroll Obligations and the Impact > Beating Complexity through Integration and Automation 2011 Concur, all rights reserved. Concur is a registered trademark of Concur Technologies, Inc.

5. THE PAIN Employees create payroll obligations when they travel but.. The payroll team has no idea: when where and for how long theyre traveling 2011 Concur, all rights reserved. Concur is a registered trademark of Concur Technologies, Inc.

7. 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 2011 Concur, all rights reserved. Concur is a registered trademark of Concur Technologies, Inc.

8. 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 2011 Concur, all rights reserved. Concur is a registered trademark of Concur Technologies, Inc.

9. WHY NOW? Prolonged Recession Easier to tax non-residents (non-voters!) PLUS > Better methods to analyze transactions & identify who owes 2011 Concur, all rights reserved. Concur is a registered trademark of Concur Technologies, Inc.

11. How Big? .. HOW BIG? . New York State: $4.9B (7% of budget) BIG 4 example: $1.3M annual U.S. exposure 2011 Concur, all rights reserved. Concur is a registered trademark of Concur Technologies, Inc.

12. 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 2011 Concur, all rights reserved. Concur is a registered trademark of Concur Technologies, Inc.

13. THE MISSION Execute multi-jurisdictional payroll each payroll period across our entire employee population 2011 Concur, all rights reserved. Concur is a registered trademark of Concur Technologies, Inc.

15. 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 2011 Concur, all rights reserved. Concur is a registered trademark of Concur Technologies, Inc.

17. BEATING COMPLEXITY States with no tax Reciprocity Withholding required in state? Technical & practical thresholds 2011 Concur, all rights reserved. Concur is a registered trademark of Concur Technologies, Inc.

18. 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 employees home state for payroll purposes. 2011 Concur, all rights reserved. Concur is a registered trademark of Concur Technologies, Inc.

19. 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 employees home state for payroll purposes. 2011 Concur, all rights reserved. Concur is a registered trademark of Concur Technologies, Inc.

20. 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 employees home state for payroll purposes. 2011 Concur, all rights reserved. Concur is a registered trademark of Concur Technologies, Inc.

21. STEP 4: TECHNICAL & PRACTICAL Technical & practical thresholds Rules and regulations differ in EVERY state. Blend of technical and practical is often a good approach. 2011 Concur, all rights reserved. Concur is a registered trademark of Concur Technologies, Inc.

23. OBJECTIVE Help customers: Save time Automate manual processes to comply Save money Eliminate financial risk of penalties 2011 Concur, all rights reserved. Concur is a registered trademark of Concur Technologies, Inc.

24. WHAT IT DOES Speaks to your Concur system No manual processes Delivers report each payroll period Supports your existing payroll process 2011 Concur, all rights reserved. Concur is a registered trademark of Concur Technologies, Inc.

25. FLIP THE SWITCH Rapid deployment by Concur Admin No linking individual accounts Syncs as employees book Includes historical travel 2011 Concur, all rights reserved. Concur is a registered trademark of Concur Technologies, Inc.

32. 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 2011 Concur, all rights reserved. Concur is a registered trademark of Concur Technologies, Inc.

33. 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 2011 Concur, all rights reserved. Concur is a registered trademark of Concur Technologies, Inc.

37. FREE ANALYSIS OFFER EXCLUSIVELY FOR CONCUR CLIENTS Save over $2,500 by enrolling for a free analysis by November 1st! 2011 Concur, all rights reserved. Concur is a registered trademark of Concur Technologies, Inc.

40. 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 years Payroll Congress Conference): http://www.ceridian.com/resources/webinars-ondemand/managing-state-income.html 2011 Concur, all rights reserved. Concur is a registered trademark of Concur Technologies, Inc.