Remote Employees in Different States: Paystub Review Checklist

For a remote employee, review the stub against two addresses: where the work is performed and where the employee lives. The work location often decides which state's wage statement rules and minimum wage apply, while withholding can depend on both, through residence-based taxes, reciprocal agreements and rules like New York's for telecommuters.

A remote hire in another state is where many small employers first meet multi-state payroll. The stub may look identical to everyone else's, yet the tax lines, the required statement items and even the minimum wage can be different. The broader survey of state-specific paystub questions covers how state rules differ; this checklist is about getting one remote employee's stub right.

Work state versus home state: what each address can trigger

Neither address wins every time. Some tax lines follow residence, some follow the place where work is done, and some look at both. The examples below come straight from the agencies that administer each tax.

The pattern to take away is that a remote employee's stub cannot be checked from the employer's address alone. You need both addresses, and you need to know which rule each line follows.

Keep both addresses, with dates, on the employee file

Payroll systems often store one address and assume it is both home and workplace. For a remote employee, keep them as two separate fields with effective dates:

• Home address: where the employee lives, used for residence-based taxes and for mailing year-end forms.
• Work location: where the work is actually performed, which for a fully remote employee is usually the home office address, not the company's headquarters.
• Office days: if the employee splits time between home and a company office, a record of the pattern, since some rules count days.
• Effective dates: when each address or pattern started, so a change can be matched to the right pay period.

Ask remote employees to tell you before they relocate, even temporarily. A stub built on an old address can be wrong for several pay periods before anyone notices, and the article on when an employee moves states covers what to recheck after a move.

The remote employee paystub review checklist

Run this list when a remote employee starts, whenever either address changes, and at least once before year end:

1. The work location on file matches where the employee actually works, including any regular days in a company office.
2. The home address on file is current and has an effective date.
3. Every state income tax line on the stub corresponds to a state connected to the employee's work or residence.
4. Local tax lines, such as a Pennsylvania EIT code or an Ohio school district, match the addresses on file.
5. Any reciprocal agreement certificate the employee gave you is on file, and the withholding reflects it from the right date.
6. Deduction labels for state programs use the state's own program names, not a generic "State other".
7. Hourly rates meet the minimum wage for the work location, including any city or county rate.
8. The stub carries every item the work state requires on a wage statement.
9. The delivery method, paper or electronic, is one the work state permits on the terms you use.
10. Year-to-date state wages and withholding can be split by state, so they match the state boxes on the W-2.

If a line looks unfamiliar, the explainer on how deduction lines work is a good first stop before asking payroll.

A Pennsylvania resident working for a New Jersey employer

Reciprocal agreements are one of the few places where a single form visibly changes a stub. New Jersey's Division of Taxation says compensation paid to Pennsylvania residents employed in New Jersey is not subject to New Jersey income tax, and that the employee completes Form NJ-165 so the employer stops withholding it. The agreement runs the other way too: New Jersey residents working in Pennsylvania give their employer Form REV-419EX.

Illustrative example (made-up figures): A Pennsylvania resident starts working remotely for a New Jersey company on a biweekly schedule, with gross pay of $2,500 each period. The NJ-165 is not collected until after the second payday, and the payroll system withholds New Jersey income tax of an assumed $70 on each of the first two stubs. From the third stub on, the New Jersey line shows $0 for the current period, while its year-to-date figure stays at 2 × $70 = $140 for the rest of the year. The review catches two things: the form should have been collected at hire, and which Pennsylvania state and local lines belong on the stub needs confirming against Pennsylvania's own rules. How the $140 is settled is a tax filing question for the employee.

For the New Jersey side of that arrangement, the New Jersey paystub details page collects the state's basics in one place.

A telecommuter whose primary office is in New York

New York is the best-known case of a work-state rule reaching into an employee's home. The Department of Taxation and Finance says that if you are a nonresident whose primary office is in New York State, your days telecommuting are considered days worked in the state unless your employer has established a bona fide employer office at your telecommuting location.

Illustrative example (made-up figures): An employee lives outside New York, is assigned to a Manhattan office and works 230 days in 2026: 92 in the office and 138 from home. Under the rule New York describes, and assuming the employer has not established a bona fide employer office at the employee's home, all 92 + 138 = 230 days count as days worked in New York. A payroll record that treated the 138 home days as days in the employee's own state would not match New York's approach. How the employee's home state treats the same wages is set by that state's revenue department, which is a separate check.

The New York paystub details page covers the state's wage statement items alongside its tax lines.

Local taxes that a home address can switch on

City and school district taxes are where remote stubs most often go quietly wrong, because they depend on an exact address rather than a state.

• Pennsylvania: under Act 32, DCED says the earned income tax withheld is always the higher of the employee's resident rate and the work location's nonresident rate, and employees complete a Residency Certification Form at hire and when their address changes. A remote employee's work location may be their home, which changes the comparison.
• Ohio school districts: the Ohio Department of Taxation says school district income tax is withheld from employees who live in a taxing district, based on residency alone, and employees indicate their district on Form IT 4.
• Ohio municipalities: under Ohio Revised Code section 718.011, an employer generally is not required to withhold a municipality's income tax for an employee who works there on 20 or fewer days in a calendar year, unless that municipality is the employee's principal place of work.
• New York City and Yonkers: withholding follows city residence for residents of both, and Yonkers also taxes nonresidents on wages for work performed there.

Label conventions for these lines vary between payroll systems. The guide to local tax lines on a stub explains what the common abbreviations mean.

Year end: making the state boxes on the W-2 add up

Everything above ends up on the Form W-2. The IRS General Instructions for Forms W-2 and W-3 for 2026 assign boxes 15 through 20 to state and local income tax information, which is where wages and withholding for each state and locality appear. A remote employee with two states or a local tax will have more than one set of entries.

Stubs make that reconciliation straightforward only if their year-to-date figures can be split the same way. Before the last payroll of the year, total each state's and each locality's wages and withholding from the stubs, and compare them with the payroll provider's year-end report. Differences are much easier to fix in December than after W-2s have been furnished.

State and local rules for remote work change often and differ widely, and several of the rules above have exceptions not covered here. The state revenue department and labor department for each state involved, and the local tax authority for any city or school district, publish the current requirements. This checklist is for reviewing records and is not tax or legal advice; a payroll professional can confirm the treatment for a particular employee.