What Is Geolocation or Geocoding for Multi-State Payroll Tax Compliance?

If you’re a payroll provider, you understand the importance of accurate payroll tax and payroll tax compliance for your customers, including adherence to IRS regulations.  But payroll tax accuracy is challenging, especially when you serve customers with employees in a variety of locations, including those embracing remote work arrangements. 

Payroll compliance hinges on total address accuracy. But employees who live in different states are subject to different tax jurisdictions, and the amount of local taxes a person pays can differ vastly across regions. That’s why geocoding is a game-changer for maintaining both state and local tax compliance. 

Geolocation or geocoding translates a non-exact location, like address data, to precise geographic coordinates. When applied to payroll, tax geocode technology eliminates any guesswork to offer the accuracy that will keep your customers’ businesses running and their employees happy. If a Pennsylvania-based company has employees in both Ohio and New York, for instance, then geocoding can help your company get the proper tax withholding estimates and tax rates.

Geocoding in payroll products

By incorporating tax geocode technology into your payroll product, your customers can be confident their employees are receiving the right payroll withholding forms based on their street address. Whether it’s an employee’s residential address or a business’s work address, geocoding will convert them into specific coordinates that your product can use to map an employee to even the most obscure local tax rules and IRS requirements. In turn, your customers will be able to simplify and maintain multi-state payroll tax compliance with ease.

But building tax geocode technology and accurate withholding form automations for your payroll product are no easy feat. As an alternative to building in-house, you can leverage a third-party solution, like Symmetry, that does it all. 

Symmetry Payroll Point

Symmetry Payroll Point uses geolocation to translate any address into specific coordinates. Other geocoding solutions can only get as specific as zip code, returning all possible tax rates and leading to confusion and the need for additional research. By going beyond zip codes and leveraging coordinates, Symmetry returns the correct tax rate with precise accuracy. Payroll Point produces a detailed list of all payroll withholding addresses for one specific location. It can even complete and normalize incomplete addresses. These features are accessible through robust APIs, allowing seamless integration into your payroll product.

With Payroll Point, your customers will be able to see the addresses of every employee pinpointed on an online map for a visual representation that helps illuminate the bigger picture of employee location, as well as the nuances that may exist locally. Nexus and reciprocity are built-in as well and double-checked for accuracy with geocoding.

Symmetry Payroll Forms

With Symmetry Payroll Forms (SPF), you can offer your customers (and their employees) an automated withholding form experience backed by geocoding technology, that helps them complete, validate, and submit all applicable federal, state, and local tax withholding forms.

Symmetry’s database supports 131 US and 28 Canadian digital, compliant withholding forms for onboarding that are continuously updated for accuracy, including resident, nonresident, military spouse, and other tax forms. It also automatically determines local tax information like reciprocity agreements (i.e., agreements between two states to lower taxes for employees) along with PSD codes, EIT rates, school district numbers, and more. Plus, forms submitted through SPF are entirely digital as well as regulatory compliant and auditable for all tax jurisdictions.

Using tax geocode for multi-state payroll tax compliance 

At the end of the day, you want to provide your customers with the most accurate tax forms you can, while streamlining their experience across various tax jurisdictions and enhancing your payroll product. 

Symmetry's compliance infrastructure can help you introduce geocoding technology that will eliminate uncertainty, keep your customers compliant and help you scale. With Symmetry’s powerful APIs, you can seamlessly incorporate these advanced features into your payroll platform, enhancing its capabilities without extensive development work.