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REMOTE EMPLOYEES

Hiring a remote employee in Minnesota

Your company is in another state and one employee lives and works from home in Minnesota. Which state's taxes apply, unemployment, paid leave and Minnesota'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.

Minnesota at a glance

Income tax
Minnesota withholding
Reciprocity
With Michigan and North Dakota
Unemployment
$44,000 wage base, 1% to 4.06% new employer
Paid leave
Minnesota Paid Leave
New hire report
Within 20 days

Which state's taxes apply

Work state
Minnesota taxes wages for work done in Minnesota. Withhold Minnesota income tax on the employee's wages.Source: Minnesota Department of Revenue, 2026 Minnesota Income Tax Withholding Instruction Booklet and Tax Tables (PDF) (opens in a new tab), checked October 5, 2026
Withholding form
Form W-4MNSource: Minnesota Department of Revenue, 2026 Minnesota Income Tax Withholding Instruction Booklet and Tax Tables (PDF) (opens in a new tab), checked October 5, 2026
Reciprocity
If your office is in Michigan: Minnesota residents working there are withheld for Minnesota, with MI-W4 (line 8b). If your office is in North Dakota: Minnesota residents working there are withheld for Minnesota, with NDW-R.Source: Michigan Treasury, Form 446, 2026 Michigan Income Tax Withholding Guide (Rev. 02-26, PDF) (opens in a new tab), checked October 5, 2026; North Dakota Office of State Tax Commissioner, Income Tax Withholding (Reciprocity) (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 Minnesota 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 Minnesota
Minnesota sets no day count before a nonresident's wages for work there are withheld.Source: Minnesota Department of Revenue, 2026 Minnesota Income Tax Withholding Instruction Booklet and Tax Tables (PDF) (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

  • Minnesota: all wages.

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

Unemployment

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

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 Minnesota, so the work is localized in Minnesota: pay Minnesota unemployment tax, not your company state's.

Agency
Minnesota Department of Employment and Economic Development (DEED), Unemployment Insurance ProgramSource: Minnesota UI Program, Employer Handbook: New Employer Registration (opens in a new tab), checked October 5, 2026
Wage base
$44,000 IndexedSource: Minnesota UI Program, Unemployment Insurance (UI) Tax Rates (opens in a new tab), checked October 5, 2026
New employer rate
1% to 4.06% 1.00% to 4.06% by industry (1.00% for most industries), plus the 0.40% base tax rate, a 14% additional assessment on that tax and the 0.10% workforce development assessment: 1.696% all-in at the 1.00% rate Surcharges not included Construction 1.98% to 8.9%Source: Minnesota UI Program, Tax Rate for New Employers (2026 rates) (opens in a new tab), checked October 5, 2026

Open the account: Minnesota payroll tax registration

Minnesota Paid Leave (opens in a new tab)

Status
ContributingSource: Minnesota Paid Leave, Premium Rate and Contributions (opens in a new tab), checked October 5, 2026
Total rate
0.88%Source: Minnesota Paid Leave, Premium Rate and Contributions (opens in a new tab), checked October 5, 2026
Employee share
Up to 0.44%Source: Minnesota Paid Leave, Premium Rate and Contributions (opens in a new tab), checked October 5, 2026
Employer share
0.44%Source: Minnesota Paid Leave, Premium Rate and Contributions (opens in a new tab), checked October 5, 2026
Small employers
30 or fewer employees: employer share 0.22% Small also needs an average wage no more than 150% of the state average ($27,745.88 a quarter)Source: Minnesota Statutes 268B.14, Premiums (opens in a new tab), checked October 5, 2026

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

Minnesota employer rules

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

Final pay
Fired: Within 24 hours of the employee's demand Quit: First regular payday after the last day (second payday if the first is under 5 days away), no later than 20 calendar days after the last daySource: Minnesota Statutes 181.13 and 181.14, Payment of wages at separation (opens in a new tab), checked October 5, 2026
Pay frequency
At least once every 31 days on a regular payday set in advance; commissions at least every three monthsSource: Minnesota Statutes 181.101, Wages; how often paid (opens in a new tab), checked October 6, 2026
Pay notice
Written notice at the start of employment (pay rate and basis, allowances, paid leave accruals, exempt status, deductions, pay period and paydays, employer name, address and phone), signed by the employee and kept on file; in English with a statement offering other languages. Changes in writing before they take effect.Source: Minnesota DLI, Employee Wage Notice (opens in a new tab), checked October 5, 2026
New hire reporting
Within 20 days of the date of hire.Source: Minnesota New Hire Reporting Center, Employer Brochure (PDF) (opens in a new tab), checked October 5, 2026
E-Verify
State contracts for services over $50,000 must require the vendor and all subcontractors to certify they use E-Verify for new hires who will work on the contract. No private-employer mandate.Source: Minnesota Statutes 16C.075, E-Verify (opens in a new tab), checked October 5, 2026
Sick leave
Paid sick leave required, from the first employee. Employees expected to work at least 80 hours a year in Minnesota.Source: Minnesota DLI, Earned Sick and Safe Time (ESST) (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 Minnesota, and whether one remote employee creates tax nexus for your company, are separate questions this page does not cover.

More on Minnesota

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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