In a recent PayrollOrg webinar titled “Local Payroll Taxes: The Practical Approach to Reducing Risk,” payroll professionals were given a detailed look at the growing complexity of local payroll tax compliance and the increasing need for automation. Held on July 23, 2025, the session featured Keegan Robinson, CPP, Head of Tax Research and Compliance at Symmetry, and Greg Lyon, Head of Product at Symmetry, who shared insights into how employers can better manage risk and streamline operations.
Poll Results Reflect Cautious Optimism
Despite the challenges, most webinar attendees expressed confidence in their current local tax processes. According to a live poll conducted at the start of the session, 85% of respondents said they felt either “somewhat confident” (59%) or “very confident” (26%) in the reliability and accuracy of their local tax assignment methods, though several acknowledged room for improvement. Only 9% indicated a lack of confidence, suggesting that while the majority are managing, there is still a clear opportunity for optimization—particularly through automation.
A Growing Compliance Burden
The presenters painted a picture of a rapidly evolving local tax landscape. Currently, 15 states impose local payroll taxes, with Pennsylvania alone accounting for more than 5,200 of the 6,296 local taxes nationwide. Ohio and Kentucky follow with over 1,000 and 280 local taxes, respectively. From July 2024 through June 2025, nearly 200 changes were made to local tax codes, including the introduction of 30 new taxes since the start of 2024.
Robinson emphasized that the sheer volume and variability of local taxes—combined with the lack of a centralized data source—pose significant compliance challenges. Publicly available tools are often incomplete, and jurisdictions are increasingly modernizing their systems to enforce compliance more efficiently. This has raised the stakes for employers, who face penalties, amended returns, and reputational damage if they fail to get it right.
Another live poll conducted during the webinar reinforced the scope of the compliance burden facing payroll teams. When asked to identify their biggest challenges in managing local payroll taxes, 59% of respondents selected all of the following: keeping up with frequent local tax law changes, ensuring address-level accuracy for remote and hybrid employees, managing the manual effort and time required, and correctly handling relocations and onboarding.
The Case for Automation
To address these challenges, Lyon advocated for automating local tax assignment. He explained that manual processes are not only time-consuming—taking up to 30 minutes per employee—but also prone to error. For companies onboarding thousands of employees annually, this can translate into thousands of hours lost. Automation, he argued, can eliminate these inefficiencies while improving accuracy and employee satisfaction.
Four-Step Automation Process
The webinar outlined a four-step automation process: triggering tax setup during onboarding or address changes, collecting residential and work addresses, determining applicable taxes using a technology partner, and updating the employee’s tax profile in the payroll system.
Lyon stressed the importance of rooftop-level geolocation, noting that even buildings across the street from each other can fall under different taxing jurisdictions.
What to Look for in a Compliance Tool
Attendees were also advised on what to look for in a local tax compliance tool. Key features include plug-and-play API integration, transparent tax logic, auto-assignment capabilities, and downloadable audit trails. These tools not only ensure compliance but also provide peace of mind and audit readiness.
The session concluded with a call to action for payroll teams to evaluate their current processes and consider modernizing their systems. As local tax regulations continue to evolve, the presenters stressed that automation is no longer a luxury—it’s a necessity.
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