Equity Compliance for Mobile Employees: An Example Employee Journey

August 2020

Equity compensation is regulated by complex tax requirements that vary by country, state, and even local jurisdiction. When a taxable event is triggered, such as the vesting of employee stock, withholding calculations and reporting must be done in a timely manner.

The following is an example of one mobile employee’s journey and the tax withholding obligations triggered for the company in each country, state, and locality.

Automated programs can assist companies in complying with the onerous regulatory requirements related to the taxation of global equity plans. Automated software brings together equity compensation and payroll information from across a company into one place, rather than being spread across different offices and jurisdictions. Doing so helps companies avoid costly fines, end-of-year scrambles, and time-consuming payroll report amendments and corrected W-2s. With global compliance requirements changing at a rapid pace, automating tax withholding enables taxation estimates to pivot and adjust to keep up with new regulations.