Remote work: what remote means for workers and employers

By the HRPricing editorial teamReviewed October 18, 2026How we research and score

Remote work means doing your job from somewhere other than your employer's workplace, most often from home, staying in touch by phone, email and video. For employers, location still counts: the state or country where a remote employee physically works decides which payroll taxes you register for and pay, such as Texas unemployment tax at 2.70% on the first $9,000 for a new employer.

Remote work: a work arrangement in which an employee does their job away from the employer's office, usually from home, rather than at a central workplace.

Remote, hybrid, telework and WFH

US employment law has no single definition of remote work. The federal government uses the word telework: 5 USC 6501(3) describes a work flexibility arrangement under which an employee does the duties of their position from an approved worksite other than the one they would otherwise work from.

  • Remote: no regular office; you may never visit one.
  • Hybrid: some days in the office, some away.
  • WFH: work from home, the most common remote setup; see WFH meaning.
  • Digital nomad: a remote worker who moves between countries; see digital nomad.

A company whose staff work from many places has a distributed workforce.

A remote hire in another state

A remote hire in a new state usually means registering there for unemployment insurance, for income tax withholding if the state taxes wages, and reporting the new hire to that state within 20 days or less (42 USC 653a). Two examples for one new employee:

First-year state payroll setup for one remote employee
StateIncome tax withholdingSUTA, new employer, 2026
TexasNone (no state income tax)2.70% x $9,000 base = $243.00
PennsylvaniaFlat 3.07%, for residents and for nonresidents working in PA; reciprocal agreements with IN, MD, NJ, OH, VA and WV3.822% x $10,000 base = $382.20

Sources: Texas Workforce Commission; Pennsylvania Department of Revenue and Department of Labor and Industry. Checked Oct 16, 2026. HRPricing arithmetic.

Moves cause errors. One Gusto customer described two employees moving from Utah to Massachusetts (Trustpilot, June 10, 2026), and a Justworks reviewer said wages were reported to New York for someone who did not live or work there (Trustpilot, June 3, 2025, more than a year old). Rates for every state are in 2026 SUTA rates, and our payroll software comparison shows which providers register state accounts for you. More rules: payroll compliance.

A remote worker in another country

Your US payroll cannot employ someone who lives and works abroad. You have three options: set up a local entity, hire through an employer of record, or contract with them if the work is independent. Published EOR fees run $99 (Native Teams, whose help center says EUR 99) to $699 (Oyster) per employee a month (checked October 16 and 18, 2026). See what an employer of record does and the best EOR providers. Treating a full-time remote worker as a contractor carries misclassification risk.

Frequently asked questions

What does remote mean in a job listing?
It means you can do the job away from the employer's office, usually from home. Many listings limit where you can live, such as "US only" or a list of states, because the employer must register for payroll taxes in each state where staff work.
Does remote mean work from home?
Usually, but not always. Remote means away from the employer's workplace; that can be home, a coworking space or another city. Work from home (WFH) is the most common kind of remote work.
What is the difference between remote work and telework?
They mean much the same thing. Telework is the term in federal law: 5 USC 6501 describes an arrangement where an employee works from an approved worksite other than their usual one. Remote work is the everyday term and often means no regular office at all.
Which state's taxes apply to a remote employee?
Generally the state where the employee physically works. For example, Pennsylvania taxes nonresidents working in PA at a flat 3.07%, and a Texas-based remote hire means Texas unemployment tax (2.70% on $9,000 for a new employer in 2026) but no state income tax.
What is a remote worker?
A remote worker is an employee or contractor who does their job away from the employer's premises, usually from home, and communicates by phone, email and video.
Sources (13)
  1. Cornell LII (statute text): 5 USC 6501 (telework definitions) (checked Oct 18, 2026)
  2. Cornell LII (statute text): 42 USC 653a (new hire reporting) (checked Oct 16, 2026)
  3. Texas Workforce Commission: Unemployment tax rates (checked Oct 16, 2026)
  4. Pennsylvania Department of Revenue: Employer withholding (checked Oct 16, 2026)
  5. Pennsylvania Department of Labor and Industry: UC tax yearly highlights (checked Oct 16, 2026)
  6. Trustpilot: Gusto reviews (read Oct 16, 2026)
  7. Trustpilot: Justworks reviews (read Oct 16, 2026)
  8. Pebl: Pebl EOR pricing (checked Oct 16, 2026)
  9. Deel: Deel pricing (checked Oct 16, 2026)
  10. Oyster: Oyster pricing (checked Oct 16, 2026)
  11. Payoneer Workforce Management (Skuad): Pricing (checked Oct 16, 2026)
  12. Native Teams: Pricing (checked Oct 18, 2026)
  13. Native Teams: Pricing plans, features, benefits and how they work (help center) (checked Oct 18, 2026)

This page is general information, not tax, legal or accounting advice. Rules and rates change, so check the official source linked above before you file or sign a contract. Read our disclaimer.