NEWWorklio Insurance: benefits and pay-as-you-go workers' comp, built into payroll.Learn more
WORKLIOHCM · Payroll + HRInsurance · Benefits + Coverage
Worklio for platforms · embedded payroll
HCM
Book a demo
All resources
REMOTE EMPLOYEES

Hiring a remote employee in Montana

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

Montana at a glance

Income tax
Montana withholding
Reciprocity
With North Dakota
Unemployment
$47,300 wage base, 1.18% to 2.18% new employer
Paid leave
None
New hire report
Within 20 days

Which state's taxes apply

Work state
Montana taxes wages for work done in Montana. Withhold Montana income tax on the employee's wages.Source: Montana Department of Revenue, Montana Employer and Information Agent Guide with Withholding Tax Tables, 2026 (PDF) (opens in a new tab), checked October 5, 2026
Withholding form
Form MW-4Source: Montana Department of Revenue, Montana Tax Allowances and Exemptions (Form MW-4) (opens in a new tab), checked October 5, 2026
Reciprocity
If your office is in North Dakota: Montana residents working there are withheld for Montana, with NDW-R.Source: 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 Montana 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 Montana
Montana has a 30-day rule: no Montana withholding for a nonresident who works in Montana fewer than 30 days a year, if the rule's other conditions are met. Exactly 30 days is not addressed.Source: Montana Department of Revenue, Montana Employer and Information Agent Guide with Montana Withholding Tax Tables (V4 November 2025, 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

  • Montana: all wages.

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

Unemployment

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

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

Agency
Montana Department of Labor & Industry, Unemployment Insurance Division (UI Contributions Bureau)Source: Montana DLI, Unemployment Insurance Division: Employer Resources (opens in a new tab), checked October 5, 2026
Wage base
$47,300 IndexedSource: Montana DLI, Unemployment Insurance Contribution Taxable Wage Base & Rates for 2026 (PDF) (opens in a new tab), checked October 5, 2026
New employer rate
1.18% to 2.18% The 2026 average rate of the employer's industry, 1.00% to 2.00%, plus the 0.18% Administrative Fund Tax (1.18% to 2.18% in all); construction 2.00% + 0.18% Surcharges included Construction 2.18%Source: Montana DLI, Unemployment Insurance Contribution Taxable Wage Base & Rates for 2026 (PDF) (opens in a new tab), checked October 5, 2026

Open the account: Montana payroll tax registration

Montana has no paid leave program funded through payroll.

Montana employer rules

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

Final pay
Fired: Immediately (within four hours or by the end of the business day); with a pre-existing written policy, the next payday or 15 days, whichever is first Quit: Next regular payday or 15 days, whichever is firstSource: Montana DLI, Wage and Hour Frequently Asked Questions (opens in a new tab), checked October 5, 2026
Pay frequency
No fixed frequency; wages paid within 10 business days after due; semimonthly presumed when no pay period is setSource: Montana Code Annotated 2025, §39-3-204(1) (opens in a new tab), checked October 5, 2026
Pay notice
Only on the employee's written demand before work starts: written notice (or a conspicuous posting) of the wage rate and paydays. Unionized and agricultural employers are exempt.Source: Montana Code Annotated 2025, §39-3-203 (opens in a new tab), checked October 5, 2026
New hire reporting
Within 20 days of the date of hire.Source: Montana DPHHS, Child Support Services Division, New Hire Reporting Program (opens in a new tab), checked October 5, 2026
E-Verify
No E-Verify mandate. Every employer must request and keep either an E-Verify confirmation of the worker's status or a completed Form I-9 with the documents proving identity and work authorization, within the 8 CFR 274a.2 timelines. Using E-Verify gives a good-faith presumption. DLI enforces it with fines of up to $500, then $1,000, then $2,500 per worker, and a license suspension of 30 days to 6 months from the third violation.Source: Montana Code Annotated 2025, §39-2-1603 (Legal Employment and Government Accountability Law) (opens in a new tab), checked October 5, 2026
Sick leave
No state sick leave law.Source: Montana DLI, Wage and Hour Frequently Asked Questions (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 Montana, and whether one remote employee creates tax nexus for your company, are separate questions this page does not cover.

More on Montana

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.

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.

Your next payroll could be your first one on Worklio.

Book a demoSee pricing