How the Payroll Process Determines the Employee Work State

For some state taxes, such as unemployment insurance (SUI) and disability insurance (SDI), the payroll process must determine the employee's state of employment.

Note:

Retirees aren't subject to unemployment or disability taxes. Therefore the following hierarchy doesn't apply to them.

How the work state is determined

The payroll process uses this hierarchy based on the derived jurisdictions on employee's Tax Jurisdictions card and the assignments and associations set on their Tax Withholding card.

1. If the employee is designated as work-at-home, it checks for an Override calculation component in Resident Tax Jurisdictions on the Tax Jurisdictions card.

   • If there is, it uses the state identified on the override component.

   • If there's no override, it uses the state associated with the person's residence tax address, as set in the Resident Tax Jurisdictions calculation component.

2. If the employee isn't work-at-home, the process uses the state associated with their primary work tax address, as set in US Taxation component on their Tax Withholding card.

   Note:

   If there's no primary assignment associated with the tax reporting unit (TRU), the payroll process applies this hierarchy to the assignment with the lowest assignment ID associated with that TRU.