Businesses are hiring remote workers more than ever before to lower overhead, improve productivity, and increase employee retention. With access to the best talent all over the country, you can build a rockstar team to accelerate the growth of your business, no matter where they live.
This does come with challenges. Payroll tax regulations vary by state and you’ll need to follow their specific rules about how to register your business, which payroll taxes to pay, and how to stay in compliance.
Hiring a remote team
Scaling in this environment can be complicated, especially during the COVID pandemic. Hiring remotely means you’ll receive hundreds, if not thousands, of applicants to your open roles. Instead of focusing on geography, narrow your search by targeting talented and independent workers who thrive in an asynchronous environment.
Each new team member must be onboarded and trained for their role. Whether you’re doing this 100% remotely, or flying new hires into your headquarters, employee engagement can be a challenge – not to mention fostering a great company culture.
Honing your people strategy is crucial to the success of your business. But managing state payroll taxes and registering an account with each Secretary of State is an arduous process that takes you away from driving value for your business.
Not only that, but keeping up with state regulations and ongoing filings leaves too many chances for errors that result in fines or denied registration in a state. To stay in compliance, you’ll need to register yourself or work with a payroll tax registration expert.
Registering yourself or working with a payroll tax registration expert
Registering for state payroll taxes yourself
Alternatively, it’s possible to register your own business for state payroll taxes. If you do, it’s important to understand the time investment and all of the risks involved. There’s a high chance that you could miss changes in state requirements or mandatory annual report filings.
You must also navigate and set up accounts with multiple tax agencies for each state. Since each state has their own regulations, it gets very complicated. For example, the California Department of Tax and Fee Administration is responsible for managing over 30 different taxes and fees.
Your compliance workload can become impossible to manage as you continue to grow your business. In fact, the general rule is that each state requires employers to file a tax and wage report quarterly. That’s four filings a year per state! The last thing you want to do is say no to a great candidate solely due to the compliance burden.
There are serious risks if you don’t get this right. Your business entity can be suspended in a state if you don’t track tax changes. If you miss a state’s deadline for annual report filings, fines will start accruing. The worst case scenario is that you lose your good standing in a state and can no longer do business there.
Working with a payroll tax registration expert
Typically, companies contract with a payroll tax registration expert to register with each state’s Secretary of State. Having an expert helps businesses stay in compliance and provides peace of mind when it comes to protecting their businesses from legal / tax ramifications.
At Middesk, we hire people all across the country. But instead of hiring contracts or using a PEO, we use our own product, Agent, to register for payroll taxes in new states. There’s no need for us (or you) to hire a costly attorney or CPA. More importantly, it gives us back the time to focus on what matters most - serving our customers and growing our business.
Middesk does it better
At Middesk, we knew it could be easier. That’s why we launched Agent, which allows businesses to seamlessly register for payroll taxes in new states in a simple, low cost way that provides peace of mind.
Agent simplifies compliance and the operational overhead that comes with managing a remote team that operates in different states. By removing this friction, our customers can easily onboard remote talent pools and reinvest the time previously spent on compliance to grow their business.
Agent ensures you’re always in compliance in new states by registering for payroll tax and secretary of state accounts. But we don’t stop there, we create an amazing experience for you - our customers especially love the following features:
Managing state mail
A big cause of friction for companies that act as their own agent is managing state agency mail in a timely manner. In this scenario, your mail goes to your business headquarters where an office manager, if you have one, forwards it to the right person. These can include summons, subpoenas, or registration renewals. Due to COVID, many offices are still closed and missing an important letter will result in late penalties and fines, or worse.
Covering all state fees
Fees for registering in a single state can top $800. Middesk covers all of these fees as part of the Agent product so that you pay only our fees - no surprises.
Where Agent is headed
We’re continuously expanding the scope of Agent and bringing more transparency and control to how businesses engage with partners, suppliers, and directly with the government. By the end of March 2022, Agent will allow you to transfer your existing payroll state tax registrations to Middesk so you can manage all of your registrations in one place!
Which tier of Agent is the right fit for your business?
Essentials takes care of the minimum requirements needed to hire employees in new states including:
- Payroll tax account setup, including withholding and unemployment insurance
- Up to $800 in waived state filing fees
- State mail digital processing
- Submission within 24 hours to each state
- Secretary of state account registration and annual filings, only when specifically required for that state
Our most popular package, Premium, helps businesses proactively protect themselves from risks related to operating in new states – because hiring isn’t the only thing to worry about.
In addition to everything in Essentials, in Premium, we operate as your Registered Agent, which includes:
- Secretary of State account registrations in every state
- Annual report filings
- Annual franchise tax filings
These additional services help you avoid risks such as:
- Accruing fines and penalties
- Being blocked from applying for loans and financing
- The inability to file for a lawsuit outside your home state
- Owing back taxes for the time you operated in a state
Our most comprehensive tier. Unlimited includes everything you get with premium plus coverage for all 50 states. Best for companies operating in 10+ states.
How does it work?
It’s easy! Signing up with Agent only takes a few steps:
- Create your account
- Tell us about your business
- Choose your plan
- Fill out the required information for the new state
- And you’re done! It’s that simple
Run your business, we’ll take care of the rest
Remote employees have become a key differentiator for businesses. Hiring a dispersed workforce gives your company greater flexibility and greater access to talent. So instead of getting bogged down in complicated tax compliance work, use Agent to save you time, money, and protect your company from risk.