Working remotely and want to move? Here’s what you need to know.

Will my company let me work from somewhere else?

Many companies have moved to more flexible work from home policies due to the pandemic, but that doesn’t always mean you can work from just anywhere. If you’re staying here in the greater Nashville area, you are likely to be fine, but many companies will incur greater tax burdens due to a change in location by their employees when moving out of state or country. Some companies may even be working on a plan to change their business model to smaller satellite offices or teams and reopen post-pandemic. So be sure to check with HR and get the all clear before taking off to Hawaii or Fiji to enjoy the sand and surf while you work!

Will moving affect my compensation?

Many employers weight their compensation based on economic drivers related to location. Think about the cost of living in NYC versus here in Nashville. And often the pay scale is related to that location. So say you’ve been working for a company here in Middle Tennessee and just found out they will be shutting down the offices and allowing you to work remotely going forward. That doesn’t necessarily mean you can move out to East Tennessee, where the cost of living is considerably less, and still be paid the same. Labor may also be cheaper there, so you may experience a compensation change. But if you have a nationally competitive job and want to move across the country there could also be little to no difference in your pay, because your employer may have to compete with other similar companies to keep you. So again, check with your Human Resources counterparts and get a clear picture of how a move might affect you.

How will relocating impact my benefits?

Both state and local laws impact many of the benefits employers provide. Most notably is Health Insurance, which can be greatly affected by a move out-of-state. Many providers only offer coverage in select states. Or perhaps the insurance options your employer provides are not available in the region you plan to relocate too. Maybe you are moving to a country that offers free health care. But are you as a U.S citizen entitled to take advantage of it? Even leave benefits might be impacted. Some states don’t allow companies that offer paid leave as part of their compensation package to not roll that time over to the next year. It’s treated as accrued earnings that the company must pay at an employee’s exit. Still others do allow for take-it-or-leave it paid leave. You could also experience a change in paid sick leave depending on where you are moving to depending on state regulations. You may even experience a change in 401(k) matching. These are all important questions to ask your HR department in order to gain a clearer understanding of how relocating will impact your total financial picture.

How will moving affect my taxes?

This one may be a better question for your accountant than your company’s Human Resources representative, who may not understand the tax laws of other states to the full extent. State income taxes vary widely across the United States. Moving to another country altogether? Likely even more so. In most southern states, including here in Tennessee, there is no income tax, but move just North to our bordering states of Kentucky and Virginia and the state income taxes are suddenly 5% or more. Add to that the slight complication that you are now living in a state with income tax, but employed in a state without an income tax and the picture becomes even more murky. Remember your social studies teacher talking about Double Taxation between different countries, or the treaties preventing it? Maybe not… For many countries this is a relatively new idea. Even here in the U.S. among our own states reciprocal agreements are not yet a given. Only 17 states have reciprocal agreements with other states allowing non-residents to not pay taxes. So talk to your payroll department or accountant and know exactly what you are getting into.