How do i set up payroll for Employees that work outside my state.

Setting up payroll for employees working outside your state is crucial, @PRobUtah. I'm here to help you navigate the process. 

The state payroll taxes that you and your employees need to pay depend on where your employees live and work. These taxes can include State Withholding, State Unemployment Insurance, local taxes, State Disability Insurance, or Paid Family Leave.

Reach out to the state withholding, unemployment insurance, and local tax agencies where your employees live and work. They will inform you about the applicable taxes and assist you in registering for the necessary account numbers to pay taxes and file forms.

Have you already set up an employee? If yes, please follow the steps below to change their work location.

Here's how:

1. Go to Payroll, then select Employees.
2. Select the employee who's working outside your state.
   
    
3. In the Employment details click Edit.
   
    
4. Click the dropdown menu of the Work location.
5. Select + Add work location if the location is not on the list.
   
    
6. Enter your employee's work location, then click Save.
    
7. From Tax withholdings, click Edit.
8. In the State withholding section, if you see two states:
   • Select Do not withhold (exempt) in the Filing Status dropdown if you don't need to collect state withholding in one state.
   • If there is a reciprocity agreement between the two states, choose if your employee provided a Certificate of Nonresidence form, as it decides which state's withholding is collected.
9. Select the applicable taxes and enter rates if you see Local Taxes or Other taxes.
10. Select the applicable tax(es) in Tax Exemptions, then click Save.
11.  

For detailed instructions from the steps above, you can read the set up employees and payroll taxes in a new state.

On the other hand, if you haven't added your employee to the list, you can add them to QuickBooks Payroll and edit the remaining employee information, especially their work location.

You may also visit the articles below that you can refer to for your future work:

• Set up local taxes in QuickBooks Online Payroll
• Run payroll reports

I would love to introduce you to the QuickBooks Live Expert Assisted team. They're a group of experienced experts ready to help you smooth out your financial operations that fit your business needs.

Please keep us informed by replying to this thread. The Community team and I are always on standby to assist you further. Have a nice day!