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REMOTE EMPLOYEES

Hiring a remote employee in Vermont

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

Facts from the official sources listed at the end of this page; the oldest was read from an archived copy dated August 31, 2026. For employers. General information, not legal or tax advice: confirm a rule with the agency before you rely on it.

Vermont at a glance

Income tax
Vermont withholding
Reciprocity
None
Unemployment
$15,400 wage base, 1% new employer
Paid leave
Vermont Family and Medical Leave Insurance (VT FMLI) and Vermont Child Care Contribution
New hire report
Within 10 days

Which state's taxes apply

Work state
Vermont taxes wages for work done in Vermont. Withhold Vermont income tax on the employee's wages.Source: Vermont Department of Taxes, GB-1210-2026, 2026 Income Tax Withholding Instructions, Tables, and Charts (PDF) (opens in a new tab), checked October 5, 2026
Withholding form
Form W-4VTSource: Vermont Department of Taxes, GB-1210-2026, 2026 Income Tax Withholding Instructions, Tables, and Charts (PDF) (opens in a new tab), checked October 5, 2026
Reciprocity
No state exempts Vermont residents from its withholding by reciprocity.Source: Vermont Department of Taxes, Withholding Tax FAQs (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 Vermont 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 Vermont
Vermont has a 30-day rule: no Vermont withholding for a nonresident who works in Vermont 30 days a year or fewer, for an employer based outside Vermont (an employer in Vermont has no day limit), if the rule's other conditions are met.Source: Vermont Department of Taxes, Withholding for Employers (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

  • Vermont: all wages.

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

Unemployment

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

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

Agency
Vermont Department of Labor, Unemployment InsuranceSource: Vermont DOL, Unemployment Insurance for Employers (opens in a new tab), checked October 5, 2026
Wage base
$15,400 IndexedSource: Vermont DOL, Quarterly Reporting & Taxable Wage Information (opens in a new tab), checked October 5, 2026
New employer rate
1% 1%; an out-of-state (foreign) construction corporation in NAICS 236, 237 or 238 gets the industry average instead (1.9%, 4.0%, 2.7%) Surcharges included Construction 1.9% to 4%Source: Vermont DOL, Unemployment Tax Rates (opens in a new tab), checked October 5, 2026

Open the account: Vermont payroll tax registration

Vermont Family and Medical Leave Insurance (VT FMLI) (opens in a new tab)

Status
VoluntarySource: Office of Governor Phil Scott, Governor Phil Scott and The Hartford Announce February Launch of Vermont Family and Medical Leave Insurance Program for Employers (January 18, 2024) (opens in a new tab), checked October 5, 2026
Total rate
Set by the insurer or planSource: Office of Governor Phil Scott, Governor Phil Scott and The Hartford Announce February Launch of Vermont Family and Medical Leave Insurance Program for Employers (January 18, 2024) (opens in a new tab), checked October 5, 2026
Employee share
Set by the insurer or planSource: Office of Governor Phil Scott, Governor Phil Scott and The Hartford Announce February Launch of Vermont Family and Medical Leave Insurance Program for Employers (January 18, 2024) (opens in a new tab), checked October 5, 2026
Employer share
Set by the insurer or planSource: Office of Governor Phil Scott, Governor Phil Scott and The Hartford Announce February Launch of Vermont Family and Medical Leave Insurance Program for Employers (January 18, 2024) (opens in a new tab), checked October 5, 2026
Small employers
NoneSource: The Hartford, Vermont Optional Family and Medical Leave Insurance (VT FMLI) (opens in a new tab), checked October 5, 2026

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

Vermont employer rules

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

Final pay
Fired: Within 72 hours of discharge Quit: Last regular payday, or the following Friday if there is noneSource: 21 V.S.A. §342, Weekly payment of wages (Vermont General Assembly) (opens in a new tab), read from an archived copy dated August 31, 2026 (opens in a new tab)
Pay frequency
Weekly; biweekly or semi-monthly after notice to each employee; payday within 6 days of the end of the pay period (13 days under a collective bargaining agreement)Source: 21 V.S.A. §342, Weekly payment of wages (Vermont General Assembly) (opens in a new tab), read from an archived copy dated August 31, 2026 (opens in a new tab)
Pay notice
No general wage notice at hire. Notice to each employee before paying biweekly or semimonthly instead of weekly; written disclosure and written consent before paying by payroll card, and 21 days' written notice of any card change. Employers with 5 or more employees must put the pay or pay range in every Vermont job ad (from July 1, 2025).Source: 21 V.S.A. §342, Weekly payment of wages (2025 Vermont Statutes, Justia) (opens in a new tab), checked October 5, 2026
New hire reporting
Within 10 days of the start date.Source: Vermont DOL, Vermont Employer Handbook: A Guide to Unemployment Insurance in Vermont (PDF, file dated 06/26) (opens in a new tab), checked October 5, 2026
E-Verify
No state E-Verify mandate for private employersSource: 21 V.S.A. §444a, Employment of aliens (2025 Vermont Statutes, Justia) (opens in a new tab), checked October 5, 2026
Sick leave
Paid sick leave required, from the first employee.Source: 21 V.S.A. §482, Earned sick time (2025 Vermont Statutes, Justia) (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 Vermont, and whether one remote employee creates tax nexus for your company, are separate questions this page does not cover.

More on Vermont

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.

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