What's covered in this guide?:
How locations feed tax jurisdictions
In Workforce Payroll, locations are the bridge between where an employee works and how they're taxed. Each location carries its own set of tax jurisdictions (federal, state, county, city), and an employee's report location is the field that decides which of those jurisdictions actually apply on their pay.
A location in Workforce represents a physical work site — a store, branch, warehouse, restaurant, or office — and has an address. On top of that address, each location is configured with the tax jurisdictions that apply to wages earned there:
Federal — every location has the federal jurisdiction.
State — derived from the state in the location's address.
County and city — added where the locality has its own income tax (for example, a Pennsylvania local services tax or an Ohio municipal tax).
When payroll calculates state and local taxes for an employee, it doesn't read the address directly — it reads the tax jurisdictions attached to that location. So setting up a location's jurisdictions correctly is what makes its taxes work. You manage a location's jurisdictions in Payroll Settings → Tax Jurisdictions.
The three location concepts on an employee
There are three different "locations" Workforce tracks for an employee, and they each play a different role:
Worked location — the location attached to a specific shift or timesheet entry. An employee can work at multiple locations across a pay period (common in retail and hospitality), and each shift records where it actually happened.
Report location — the employee's primary work location for payroll. It comes from the employee's report department and is the location used for tax, withholding, and W-2 reporting.
Home location — derived from the employee's home address. Used for resident-state and local taxes when the employee lives somewhere different from where they work.
In most setups, the report location and home location point to the same state and the distinction doesn't matter. They diverge for cross-border employees — someone living in NJ and working in PA, for example.
Why report location determines payroll jurisdiction
Of the three, the report location is the single most important field for payroll. It determines:
State income tax withholding — the work state's withholding rules apply (subject to any reciprocity election).
Local income taxes — county/city/school-district taxes the report location is set up for.
State unemployment insurance (SUTA) — wages count toward the report location's state wage base, under that state's SUTA account.
Workers' compensation — the carrier and rates that apply, including state-specific schemes such as Washington L&I.
Paid leave / disability programs — for example NJ TDI/FLI, NY PFL, WA PFML, and other state-run programs.
Minimum wage and overtime rules — state and city rules such as California's daily overtime or NYC fast-food rules.
New hire reporting — the report location's state is the state Workforce files the new hire report with.
The home location is layered on top for resident-state withholding when it differs from the work state. Worked-location data on a shift is recorded for reporting and labor-cost purposes — it doesn't override the report location for tax calculation.
Common situations
Opening a new location in a new state
You'll need to register with the new state's tax agency for income tax and unemployment before payroll can be filed there. Add the location in Workforce with its address, go to Payroll Settings → Tax Jurisdictions to confirm its tax jurisdictions and complete State Tax Portal Access for the new state, then assign employees by setting their report department to one inside that location.
Remote employees
Remote employees should have a location set up in the state where they actually live and work, and that location should be their report location. If you assign a remote employee to a different state's location, taxes will calculate to that state instead of where they live.
Employees who relocate
Update the employee's report location (via report department) and their home address on the effective date. If the state has changed mid-year, year-to-date wages stay attributed to the previous state and new wages start accruing in the new one.
Employees who live in one state and work in another
When the report location and home address are in different states, both states are in play: the work state for withholding/SUTA, the home state potentially for resident withholding. If the two states have a reciprocity agreement, the employee can claim it from their state withholding form on mobile, which switches state withholding to their home state.
Multi-location work in a single pay period
Shifts can be worked at locations other than the report location. Workforce records each shift's worked location for cost reporting, but state and local taxes for the pay run still calculate against the employee's report location.
Common errors tied to locations
Missing tax jurisdictions on a location — federal or state isn't set on the location. Go to Payroll Settings → Tax Jurisdictions, open the location, and add them.
Missing report location on an employee — the employee has no report department, so payroll can't determine state/local taxes. Set a report department on their profile.
Missing or incomplete home address — needed for resident-state taxes and for new hire reporting. Fill in street, city, state, and ZIP on the employee profile.
Wrong state on a location's address — taxes will calculate to whatever state is on the address. If a site moved and the address wasn't updated, fix the address first.
Tip: If an employee's state taxes look wrong, start with their report location, then check that location's tax jurisdictions, then check the employee's home address. In that order, those three are responsible for nearly every state and local tax outcome on a pay run.