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How Payroll Professionals Stay Current on Tax Compliance in 2025

BY: Alma Stewart, CPP | 08/27/25

In the fast-paced, ever-changing world of payroll, staying compliant with tax laws isn’t optional; it’s essential. With federal, state, and local tax codes evolving each year, payroll professionals are under constant pressure to stay informed in order to be able to act quickly. From updated IRS forms to shifting state mandates and wage bases, even minor oversights can lead to costly penalties.

So, how do payroll professionals keep up with the constant changes in tax compliance? The answer lies in a proactive, multi-source approach that blends education, technology, and community engagement through regulatory bodies, employers, and the continuing education and certification offered by professional organizations.

Follow Regulatory Bodies

When it comes to compliance, there’s no better source than the regulators themselves. Payroll professionals should routinely monitor key government websites such as the IRS (IRS.gov) to track legislative changes and guidance for federal withholding tables (Publication 15-T), form changes (W-4, 941, 1099), e-filing requirements, and official updates via the IRS e-News for payroll professionals subscription. Additionally, the Department of Labor (DOL.gov) provides information on wage and hour regulations, overtime rules, and classification guidelines. The Social Security Administration (SSA.gov) is a great resource for tracking updates to the social security wage base and Forms W-2 submission processes. Finally, check state revenue and labor departments for localized guidance on withholding tables, state unemployment insurance (SUI) rates, and local tax obligations (if handled by the state).

In addition to traditional withholding and reporting duties, payroll professionals are increasingly responsible for navigating a growing patchwork of state-mandated leave programs, most notably paid family and medical leave (PFML) and paid sick leave (PSL).

More than a dozen states have enacted PFML programs that require new payroll tax withholding, employer contributions, or both. States like Colorado, Connecticut, Massachusetts, and Oregon now operate stand-alone PFML systems with the following:

  • State-administered funds
  • Contribution rates updated annually
  • Wage caps and income thresholds
  • Quarterly reporting obligations

Each state’s program has unique compliance elements. For instance, Colorado’s FAMLI program includes employer and employee contributions split 50/50, while Washington allows employers with fewer than 50 employees to opt out of paying the employer share—but not reporting or remitting the employee portion.

Payroll professionals must do the following:

  • Track effective dates and phased rollouts (e.g., Delaware and Minnesota programs launching in 2026)
  • Verify exemptions or private plan alternatives
  • Configure systems to apply the correct wage base caps and tax rates
  • Coordinate with HR and legal to ensure benefit policies align with state-mandated leave entitlements

At the same time, more states and municipalities are implementing PSL mandates, which, unlike PFML, are often unfunded mandates—meaning there’s no payroll tax, but employers must track and accrue leave based on hours worked.

States like Arizona, California, and New York have longstanding PSL requirements, but recent expansions in states like Illinois (with its new Paid Leave for All Workers Act) and growing momentum in local ordinances (e.g., Chicago, Minneapolis, West Hollywood) have made PSL compliance more complex than ever.

Key payroll impacts include the following:

  • Tracking accrual rates (e.g., 1 hour per 30 or 40 hours worked)
  • Managing carryover limits and use thresholds
  • Ensuring proper display on pay statements, where required by law
  • Applying different rules by location, even within the same state

For multi-jurisdiction employers, managing PSL can require highly granular system settings—often down to the city level.

Both PFML and PSL programs represent fast-evolving compliance areas that increasingly fall under the payroll department’s purview. These obligations go beyond basic tax withholding, requiring policy awareness, system configuration, and cross-functional coordination. As more states and cities adopt or amend these laws each year, payroll professionals must stay agile to avoid costly penalties or labor disputes.

Follow With Your Employers

Many payroll teams integrate compliance learning into their own internal review processes. Regular payroll audits, mock IRS reviews, and collaboration with legal or finance teams to perform internal audits help professionals stay alert to new risks and identify areas needing improvement.

These reviews often reveal real-time compliance issues and can lead to additional training or process changes based on the latest tax laws.

Modern payroll software programs also play a significant role in compliance. Several payroll service providers regularly push regulatory updates to ensure employers apply new rules correctly. These platforms often include the following:

  • Automated tax table updates
  • Built-in compliance alerts
  • Dashboards and learning portals for tracking recent changes
  • Integration with e-filing systems for IRS, SSA, and state reporting

Follow Professional Associations

Professional organizations and certification programs are a great way for payroll professionals to stay active and current with regulatory changes. One of the most reliable ways to stay informed is by engaging with established professional organizations like PayrollOrg. These associations offer a wealth of resources, including webinars, publications, classes, compliance updates, and annual conferences that cover regulatory changes and emerging trends as soon as they happen. Certifications such as the Fundamental Payroll Certification (FPC) and Certified Payroll Professional (CPP), which require ongoing education to maintain accreditation, will also keep you up to date on emerging compliance developments.

Other memberships with organizations like the National Association of Tax Professionals (NATP) or Society for Human Resource Management (SHRM) can also be valuable, particularly for professionals with broader responsibilities in finance or HR.

Software-based updates may help ensure that organizations remain compliant even when internal knowledge lags, but professionals must still understand the underlying rules to troubleshoot or explain issues. Payroll professionals frequently engage in ongoing education to refine their expertise and meet certification requirements. Key formats include the following:

  • Webinars and e-learning modules hosted by professional associations, payroll vendors, and law firms
  • Live seminars and conferences such as PayrollOrg’s Payroll Congress, chapters, or state-level HR summits
  • In-house training programs, especially in larger organizations, which review legal updates and process changes
  • Annual update sessions from tax professionals or auditors that combine legal updates with risk assessment

Many professionals subscribe to leading industry publications to stay ahead of the curve. The following resources from PayrollOrg offer in-depth analysis of regulatory changes, case law, and compliance strategies:

For HR professionals, HR Morning has weekly insights.

Finally, no one knows the day-to-day challenges of payroll compliance like other payroll professionals. That’s why many rely on peer networks and forums for real-world solutions. PayrollOrg offers opportunities for payroll professionals to network and to gain insight into key payroll issues through the following online or in-person forums:

  • Local chapters host meetups, monthly meetings, and email lists focused on region-specific updates
  • Joining committees can help you stay abreast of subjects like electronic payments, emerging technologies, and state and local updates
  • The Payroll Community, LinkedIn groups, Reddit forums (e.g., r/payroll), and specialized Slack channels allow for quick Q&A and idea-sharing

Peer insights can be especially useful for solving software-specific issues.

Compliance Is an Ongoing Strategy

Tax compliance isn’t a one-time task; it’s an ongoing, dynamic process that payroll professionals manage with care and diligence. The most successful professionals use a combination of authoritative sources, peer support, automation, and formal education to stay informed.

By layering these strategies, they not only remain compliant, but also become trusted advisors in their organizations—bridging finance, HR, and legal to ensure payroll is both accurate and defensible.

For more articles like this, read PAYTECH magazine (available in both printed and digital formats), free for PayrollOrg members!

Alma Stewart, CPP, is the Payroll Tax Director for Acumen Fiscal Agent and a volunteer on PayrollOrg’s Board of Contributing Writers (BCW).

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