Payroll complexity isn't getting wider. It's getting denser.
In 2018, 1 in 100 workers crossed a state line for work. By 2025 it's nearly 1 in 60 — at companies whose state filing footprint actually shrank.
This analysis draws on payroll and tax filing data processed through the Greenshades platform from 2018 through 2025, covering 153 million+ paychecks across staffing, healthcare, industrial, food service, government, nonprofit, and other sectors — running payroll across ecosystems including Microsoft Dynamics, Avionte, Aqore, and others.
Two questions drove the research:
- How has the relationship between employer state footprints and per-employee complexity changed since 2018?
- Which industries and geographies are driving the shift?
Complexity is rising inside footprints that haven't changed
The standard way to measure multi-state payroll exposure is to count states — how many does the company operate in? For most of the last decade, that was a reasonable proxy. The data suggests it no longer is.
Between 2018 and 2025, the average employer's filing footprint shrank. By every conventional measure, the compliance burden should have gotten lighter. Instead, per-employee multi-state exposure nearly doubled.
The number of states companies filed in stayed flat. The workforce complexity didn't.
| Year | Avg states |
|---|---|
| 2018 | 9.3 |
| 2019 | 6.5 |
| 2020 | 6.5 |
| 2021 | 6.8 |
| 2022 | 6.6 |
| 2023 | 6.2 |
| 2024 | 6.2 |
| 2025 | 6.3 |
| Year | Rate |
|---|---|
| 2018 | 0.9% |
| 2019 | 0.6% |
| 2020 | 1.2% |
| 2021 | 1.4% |
| 2022 | 1.4% |
| 2023 | 1.2% |
| 2024 | 1.3% |
| 2025 | 1.7% |
The two charts above tell the story in full. The left shows the conventional metric — employer state filings — declining over time. The right shows what was actually happening inside those footprints: more workers, at the same companies, crossing state lines.
The makeup of multi-state work is shifting compliance obligations
Which state-line crossings concentrate the most multi-state wages has changed significantly since 2018. The corridors with the highest volume today are concentrated in Midwest and Plains metro-area border markets — and each one carries different compliance implications.
Some adjacent-state pairs have no reciprocity agreement, meaning withholding is required in both states simultaneously. Others run through metro areas that straddle a border, adding local tax jurisdictions on top of state-level obligations. Some corridors are asymmetric — one state has an income tax, the other doesn't — which changes what's owed and where.
Count of employees who had wages subject to tax in both states in the same year. Percent increase reflects 2018 to 2025.
These aren't edge cases. They're the corridors where employees are most likely crossing, and where a compliance program built on state registration counts alone is most likely to miss something.
The shift isn't uniform across every industry
Multi-state exposure is rising in most industries, but the pace and direction vary significantly. Technology & Business Services is the only industry moving in the opposite direction — and that exception turns out to be its own version of the story.
| Industry | 2018 | 2025 | Trend |
|---|---|---|---|
| HR & Staffing | 1.8% | 3.4% | ↑ Rising |
| Industrial & Trades | 1.6% | 2.2% | ↑ Rising |
| Education | 0.8% | 0.8% | → Stable |
| Government & Nonprofit | 0.1% | 0.8% | ↑ Rising |
| Technology & Business Services | 1.7% | 0.7% | ↓ Declining |
| Food, Hospitality, & Entertainment | 0.1% | 0.4% | ↑ Rising |
| Healthcare | 0.3% | 0.3% | → Stable |
Hover over an industry
to see the analysis
Industry analysis: multi-state payroll complexity trends
HR & Staffing
At 3.4% in 2025, HR & Staffing has nearly double the multi-state rate of the next-highest industry, up from 1.8% in 2018. The average filing footprint dropped from 27 states to 12.5 over the same period — fewer states on paper, more workers crossing lines in practice.
Industrial & Trades
Rose from 1.6% to 2.2%, driven by project-based workforce deployment in construction and infrastructure. The fastest-growing corridors — IL–WI, IA–NE, and KS–MO — are all industrial labor markets where cross-border project work has grown sharply.
Education
Holds steady at 0.8%, virtually unchanged since 2018. School systems operate within defined geographic boundaries, and remote instruction does not typically trigger multi-state wage obligations unless faculty physically work across state lines.
Government & Nonprofit
The steepest relative increase in the data — from 0.1% to 0.8%, an 8× rise over seven years. Likely driven by expanded nonprofit field operations across state lines and remote work arrangements that now span state boundaries.
Technology & Business Services
The only declining industry — from 1.7% in 2018 to 0.7% in 2025, even though the average employer still files in 7.2 states. Remote work shifted the compliance risk from where workers physically cross state lines to where they log in, a different set of nexus and remote worker questions.
Food, Hospitality, & Entertainment
Grew from 0.1% to 0.4%. Still low by any measure, but trending upward — hospitality climbing fastest within the group, likely reflecting expansion of regional event and venue operations requiring cross-border staff deployment.
Healthcare
Remarkably stable at 0.3% across the full period, with an average filing footprint of just 1.7 states. Multi-state travel placement in healthcare tends to flow through staffing agencies, which appear under HR & Staffing in this data.
Complexity follows the workforce now, not the footprint
For payroll teams, the compliance environment is genuinely harder than it was in 2018 — not because of decisions made at the leadership level, but because of how work itself has changed.
The companies in this data aren't expanding into more states. Their average filing footprint actually shrank between 2018 and 2025. But the share of employees earning wages across state lines nearly doubled over the same period — on the same company populations, controlling for mix.
Payroll complexity isn't a function of how many states you operate in anymore. It's a function of how your workforce moves within whatever footprint you already have. The pressure is real, it's measurable, and it's not going away.
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Methodology
Source: Greenshades platform payroll and tax filing data, 2018–2025. Covers full calendar years. Data is drawn from the Workspaces database (paycheck-level records) and the EFP Submissions database (state-level tax filing records). All figures are aggregated; no individual employee or company records are published.
Two datasets were used:
- Dataset 1: a stable cohort of 464 companies with continuous data across the full measurement period. Used for per-employee multi-state rate trending — this removes the bias that would result from Greenshades' shifting customer mix over the period.
- Dataset 2: 708 companies with state-level EFP filing data. Used for corridor analysis and filing footprint trends.
Industry segments are sourced from CRM data and consolidated into eight reporting groups for this analysis. The "Other/Unknown" classification is excluded from all published figures. Industry classification is directionally reliable for trend analysis and not audit-grade.
The Greenshades customer population shifted over the study period, from approximately 2,300 workspace entities in 2018 to approximately 1,500 in 2025. The stable cohort methodology corrects for this mix bias in multi-state rate analysis. The 2018 filing footprint average (9.3 states) reflects a customer base that skewed toward larger, more multi-state-oriented employers; subsequent years include a broader range of company sizes.
This analysis covers multi-state wage exposure and geographic filing patterns as measures of workforce mobility. It does not cover compensation data, headcount totals, revenue, or individual employee records. Findings reflect the Greenshades customer population and are not a random sample of all U.S. employers.