Telecommuter % Configuration for US Employees

Telecommuters are employees who permanently split their time between working from home and an office. Because taxation is based on where an employee works, you need to provide a percentage of time for each location.

For a primary or secondary work assignment, you can indicate how much time that a US telecommuter works from home as a percentage of their total work time. Dayforce uses this percentage to calculate the withholding tax owed on the employee’s earnings based on the employee’s home address.

For example, if you enter 40.00 to indicate that the employee works 40% of the time from home, 40% of the earnings are taxed using the employee's primary residence address as the work location, and the remaining 60% of their earnings are taxed according to the location address of their work assignment.

When you enter a value in the Telecommuter % field, the Convenience of Employee checkbox becomes available. If the employee works in a state with Convenience of Employer/Employee (COE) regulations, you must select this checkbox to enable proper taxation of these employees. Under the COE taxation rule, employees are subject to both the income tax laws of their employer's state and their resident state if they work for a business that is located in a state or locality that adopts a COE rule and they perform their work from another state or locality at their convenience.

See Convenience of Employer and Employee (COE) Taxation Rule.

To enter telecommuter information:

1. Go to People, open the employee profile, and click Work > Work Assignments.
2. Select a work assignment record.
3. In the Payroll section, enter a numeric value in the Telecommuter % field.
4. Select the Convenience of Employee checkbox if the Convenience of Employee taxation rule applies to this employee.
5. Complete the rest of the work assignment fields as appropriate. See Add Job Work Assignments in the HR Administration Guide.
6. Click Save.

Dayforce does not support the Telecommuter % field functionality when the earnings from a non-primary work assignment are subject to these taxes:

• The Multi-State Taxation Threshold (MSTT), which supports sporadic travel that might never qualify to be taxed in the visited state. The Telecommuter % field is designed to support a permanent split between states that immediately qualify for multi-jurisdiction taxation.
• Trailing taxation, which applies a predetermined tax ratio, and this conflicts with any current tax-split configuration. For such work assignments, leave the Telecommuter % field empty.

Multi-Jurisdiction Taxation Override Settings

Dayforce considers the employee’s telecommuter % configuration when calculating the state and local withholding taxes for employees who work in multiple jurisdictions. The Dayforce tax engine applies or ignores the telecommuter % configuration, depending on how multi-jurisdiction taxation override settings are configured at the pay group, earning, and check template levels.

You can change the multi-jurisdiction override settings in these locations:

• Check-template level: In Payroll Setup > Check Templates, scroll to the United States Taxation section, and find the Disable Multi Jurisdiction Allocation Split for USA checkbox.
• Earning level: In Payroll Setup > Earnings and Deductions, click the Earnings tab and then the General sub-tab, go to the Options section, and find the Allow Multi Jurisdiction Allocation Split checkbox.
• Pay-group level: In Pay Setup > Pay Group, click the Payroll Properties tab, and find the Disable Multi Jurisdiction Taxation and Respect Fixed Employee Level MultiJ checkboxes.

It’s a good idea to review all of the multi-jurisdiction taxation override settings when setting the telecommuter % value. The following table lists different combinations of override settings and how these combinations determine if the telecommuter percentage is used in the withholding tax calculation. For the telecommuter percentage to be applied, the override settings must match any of the “Yes” combinations, as listed in the table:

Override settings and their relation to the telecommuter percentage

Pay Group Properties		Earning Options	Check Template Option	Telecommuter % Value Taken into Consideration in Payroll Calculations?
Disable Multi Jurisdiction Taxation	Respect Fixed Employee Level MultiJ	Allow Multi Jurisdiction Allocation Split	Disable Multi Jurisdiction Allocation Split for USA
False	False	True	N/A	Yes
True	True	True	N/A	Yes
True	False	True	N/A	No
False	False	False	N/A	No
True	True	False	N/A	No
True	False	False	N/A	No
False	False	True	False	Yes
True	True	True	False	Yes
True	False	True	False	No
False	False	False	False	No
True	True	False	False	No
True	False	False	False	No
False	False	True	True	No
True	True	True	True	No
True	False	True	True	No
False	False	False	True	No
True	True	False	True	No
True	False	False	True	No

Tax Location in the Work > Work Assignments Screen

The Telecommuter % field determines what is shown in the Tax Location field in the Work > Work Assignments screen of People.

• When the Telecommuter % field value is greater than zero and less than 100, two tax locations are shown: the employee's primary residence and their work assignment org location.
• When the Telecommuter % field value is zero, only one tax location is shown: the employee's work assignment org location.
• When the Telecommuter % field value is 100, only one tax location is shown: the employee's primary residence.