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REMOTE EMPLOYEES

Hiring a remote employee in Colorado

Your company is in another state and one employee lives and works from home in Colorado. Which state's taxes apply, unemployment, paid leave and Colorado's employer rules, each with its official source.

Facts checked on October 5, 2026 against the official sources listed at the end of this page. For employers. General information, not legal or tax advice: confirm a rule with the agency before you rely on it.

Colorado at a glance

Income tax
Colorado withholding
Reciprocity
None
Unemployment
$30,600 wage base, 3.05% new employer
Paid leave
Colorado Paid Family and Medical Leave Insurance (FAMLI)
New hire report
Within 20 days

Which state's taxes apply

Work state
Colorado taxes wages for work done in Colorado. Withhold Colorado income tax on the employee's wages.Source: Colorado DOR, Colorado Wage Withholding Tax Guide (opens in a new tab), checked October 5, 2026
Withholding form
Form DR 0004 (optional; federal W-4 otherwise)Source: Colorado DOR, DR 0004 Colorado Employee Withholding Certificate (opens in a new tab), checked October 5, 2026
Reciprocity
No state exempts Colorado residents from its withholding by reciprocity.Source: Colorado DOR, Colorado Wage Withholding Tax Guide (opens in a new tab), checked October 5, 2026
Convenience rules
If your company is in Delaware, New York or Pennsylvania, the employee is assigned to an office there and works there on some days, that state taxes the days worked from home in Colorado for the employee's convenience.Source: Delaware Division of Revenue, 2025 Form PIT-NON Instructions, Non-Resident Individual Income Tax Return (PDF) (opens in a new tab), checked October 6, 2026; NYS DTF, TSB-M-06(5)I, New York Tax Treatment of Nonresidents and Part-Year Residents: Application of the Convenience of the Employer Test to Telecommuters and Others (May 15, 2006, PDF) (opens in a new tab), checked October 6, 2026; PA Department of Revenue, PA Personal Income Tax Guide, Gross Compensation (opens in a new tab), checked October 6, 2026
Office days in your company's state
That state's day limit, if it has one, decides whether it withholds on those days: see its page, or the helper below.
An employee from another state working in Colorado
Colorado sets no day count before a nonresident's wages for work there are withheld.Source: Colorado Department of Revenue, Colorado Wage Withholding Tax Guide (opens in a new tab), checked October 6, 2026

Where to withhold: two states

Pick your company's state, the state where the employee lives and works from home, and the days a year the employee works at your office. The answer reads each state's rules from the data on these pages.

Your company is in
Employee lives and works from home in
Days a year at your office
Assigned to an employer office in New YorkMatters only in the states with a convenience rule (Connecticut, Delaware, New Jersey, New York and Pennsylvania), and only with office days there.

Income tax withholding

  • Colorado: all wages.

No New York withholding: the employee does no work in New York.

Unemployment

Colorado: the employee works from home there, so the work is localized in Colorado.

Simplified: resident credits, dollar tests, local taxes and a move during the year are not worked out here. Each state's rule and its source are on its page.

Unemployment

The employee works from home in Colorado, so the work is localized in Colorado: pay Colorado unemployment tax, not your company state's.

Agency
Colorado Department of Labor and Employment (CDLE), Division of Unemployment InsuranceSource: CDLE, Unemployment Insurance: Premiums (opens in a new tab), checked October 5, 2026
Wage base
$30,600 IndexedSource: CDLE, Unemployment Insurance: Premiums (opens in a new tab), checked October 5, 2026
New employer rate
3.05% 3.05% for non-construction, general construction and trades; 6.285% for heavy construction Surcharges included Construction 6.285%Source: CDLE, Unemployment Insurance: Introductory Rates (2026) (opens in a new tab), checked October 5, 2026

Open the account: Colorado payroll tax registration

Colorado Paid Family and Medical Leave Insurance (FAMLI) (opens in a new tab)

Status
ContributingSource: FAMLI Division, Employers (opens in a new tab), checked October 5, 2026
Total rate
0.88% 0.86% from January 1, 2027Source: FAMLI Division, Employers (opens in a new tab), checked October 5, 2026
Employee share
Up to 0.44%Source: FAMLI Division, Employers (opens in a new tab), checked October 5, 2026
Employer share
0.44%Source: FAMLI Division, Employers (opens in a new tab), checked October 5, 2026
Small employers
9 or fewer employees, counted in all states: no employer share Counted from employees on payroll in 20 or more weeks of the prior year; headcount due by February 28Source: FAMLI Division, Employers (opens in a new tab), checked October 5, 2026

Register before the first payroll: the steps are on Colorado payroll tax registration.

Colorado employer rules

Employment law applies where the employee works, so these follow the employee into Colorado.

Final pay
Fired: Immediately; if the payroll unit is not operating, within 6 hours after its next workday starts (24 hours if payroll is off-site) Quit: By the next regular paydaySource: CDLE, INFO #3A, Timing of Wage Payments, & Required Record-Keeping (last updated Jan. 9, 2026, PDF) (opens in a new tab), checked October 6, 2026
Pay frequency
Regular pay periods of no longer than a calendar month or 30 days, whichever is longer, with payday no later than 10 days after the period closes; paydays must be posted.Source: CDLE, INFO #3A, Timing of Wage Payments, & Required Record-Keeping (last updated Jan. 9, 2026, PDF) (opens in a new tab), checked October 6, 2026
Pay notice
Post a Notice of Paydays (regular paydays, time and place of payment) and repost whenever they change; no individual pay-rate notice at hire.Source: CDLE, Notice of Paydays poster, C.R.S. 8-4-107 (Sep 3, 2025) (opens in a new tab), checked October 5, 2026
New hire reporting
Within 20 days of the date of hire.Source: CDLE, New Employer Checklist (opens in a new tab), checked October 5, 2026
E-Verify
No E-Verify mandate for private employers. On CDLE's request, employers must show they complete federal I-9 verification (8 U.S.C. 1324a(b)).Source: CDLE, New Employer Checklist (opens in a new tab), checked October 5, 2026
Sick leave
Paid sick leave required, from the first employee.Source: CDLE, INFO #6: Healthy Families and Workplaces Act (PDF) (opens in a new tab), checked October 5, 2026

When the employee moves

Re-check the work state and the registrations before the next payroll: a move changes which state's withholding, unemployment, paid leave and employer rules apply.

Registering your business in Colorado, and whether one remote employee creates tax nexus for your company, are separate questions this page does not cover.

More on Colorado

WORKLIO HCM

Payroll for employees who work from home in another state

Worklio HCM withholds by home and work state, reciprocity included, and handles city and county taxes. We help open state withholding and unemployment accounts when you hire somewhere new, and our registration service can register your employer tax accounts for you. Taxes are calculated, deposited and filed in every state and locality, and when an agency notice arrives, you upload it and our tax team resolves it. State paid leave contributions are withheld, too.

Remote employees in other states

Sources

The agency page or document behind each fact, as checked.

General information, not legal or tax advice. Rules change; confirm current requirements with the relevant agency or your advisor. You remain responsible for your employment taxes and for each state's rules.

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