The above details are relevant for U.S businesses that hire U.S-based employees. With the rise of remote work, businesses are forced to consider the tax requirements of other countries as well. Each geographical jurisdiction has its version of healthcare, social welfare, pension contributions, and taxes. For example, many European countries have different regional taxes based on the part of the country that employees originate from. In another example, Canadian employees pay 1.58% Employment Insurance (EI) premiums, determined by their employment income. When establishing your payroll tax system, you must consider local governments and comply with local taxes. The classification of the worker will also determine the payroll tax implications. Employer payroll taxes and employee state income tax becomes more complicated for remote teams, with new legal complexities. If you hire across the state and country lines, then you need to know how to set up and run remote payroll and taxes.