Payroll in the US

Payroll in the US

Local Information

Local Time (LIVE):10:13 AM(AKST) – 2:13 PM(EST)
Local Currency:$1
Business Language(s):English
Tax Year Dates:1 Jan – 31 December

 

Thinking about expanding your business to the USA? With the world’s largest consumer market and multiple free trade agreements, the United States’ openness to new business is part of what makes it an appealing choice for those looking to expand to America.

A recognized leader in R&D and workforce talent, the US’s working nation are well known for being diverse and among the most productive and innovative in the world. It’s considered to be one of the most competitive and easiest places in the world to do business, so you’ll be in great company.

Whilst legislation may be more transparent than other countries, it’s nonetheless extensive and complex. This is particularly true if managing payroll across multiple countries! Fortunately, IRIS FMP have international payroll experience spanning over 40 years – we’ll take away the hassle and make your business’s compliance our top priority.

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Details correct at time of publication. You should not rely on these details without first seeking professional international advice.

Employer Must-Dos

In the US, the following reports must be submitted to strict deadlines

  • Federal and State tax returns
  • Form W-2, Wage and Tax Statement – wages, tips and other compensation
  • Form W-3, Transmittal of Wage and Tax Statements

Payroll in the USA

What tax considerations are there?

In the US, Federal income tax is deducted from all citizens and residents and is determined by individual income levels. Most employees have this tax deducted automatically from each paycheck they receive (Pay-As-You-Go system).

In addition to Federal income tax, the majority of states also enforce state and local income tax which is levied by individual state governments. These can vary greatly from state to state, however seven states do not impose State income tax, these are (Wyoming, Washington, Texas, South Dakota, Nevada, Florida, and Alaska).

The Federal Insurance Contributions Act (FICA) means that employers must withhold three taxes from their employees. These include social security tax, Medicare tax and Medicare surtax. As an employer you must also pay an employer’s portion of these taxes.
Businesses are also subject to corporate income tax at Federal, State and Local level.

Payroll in the USA

What are the regular working hours in the US?

The regular working hours in the US are a 40-hour week. Standard hours span 9am-6pm, Monday to Friday with a 1 hr lunch break.

What tax considerations are there?

In the US, Federal income tax is deducted from all citizens and residents and is determined by individual income levels. Most employees have this tax deducted automatically from each paycheck they receive (Pay-As-You-Go system).

In addition to Federal income tax, the majority of states also enforce state and local income tax which is levied by individual state governments. These can vary greatly from state-to-state, each flexing a degree of autonomy. However, there are seven states that do not impose State income tax, including: Wyoming, Washington, Texas, South Dakota, Nevada, Florida, and Alaska.

The Federal Insurance Contributions Act (FICA) means that employers must withhold three taxes from their employees. These include social security tax, Medicare tax and Medicare surtax. As an employer you must also pay an employer’s portion of these taxes. Businesses are also subject to corporate income tax at Federal, State and Local level.

Termination

Unlike other countries, US states recognize ‘at-will’ employment. Excluding states with limitations, this means that employers in the US can terminate employees’ contracts at any time for any reason (aside from reasons to do with discrimination). Exceptions can be quite broad, so any employee termination must be handled correctly.

 

business in San Francisco

 

Payroll in San Francisco

The City and County of San Francisco offer a number of very appealing incentives to those doing business in this Californian city. These include payroll tax exclusion for those operating a clean technology company, rebates and tax credits for businesses that use solar power, and payroll tax and city fee refunds for the film production sector.

San Francisco is a multicultural hub, with a skilled workforce. According to data collected by the city’s authority, over 52% of the population has a Bachelor’s degree, and 46% speak more than one language. These statistics illustrate the fact that the people of San Francisco are well-equipped for working in international business. As well as travel opportunities through the international airport, San Francisco has a vast train, cable car, and bus network.

Payroll in Austin

Austin, Texas has a thriving start-up community in which companies of all kinds have been able to prosper. In fact, Fortune magazine refers to Austin as the ‘rockstar of small-business cities’. This is in part because the City of Austin makes a point of supporting businesses by helping to provide access to administrative support and additional resources such as to do with legislation.

According to a survey carried out by the Kauffman Foundation, Austin has a rate of start-up growth of 81.2%. In addition to the support of the local government, the business success of the city is likely to be due to its high population and ample opportunities. It was ranked the number one place to live in the US in the 2019 US News and World Report, indicating that Austin is an extremely attractive residential destination to a wide range of people, who have a variety of skills.

 

Payroll in Austin

Payroll in Seattle

Seattle is located in the northwest corner of the US, close to the border of Canada. Renowned for its world-class dining and laid back atmosphere, Seattle is a popular destination among tourists and migrants alike.

According to the Seattle government website, there are a number of community lenders in the city that offer small business loans that have greater flexibility than those supplied by banks. The resource also offers a huge amount of information about local licensing, taxes, technology, employment, and environmental practices. It’s with this extensive governmental support that businesses of all sizes and in all sectors have been able to flourish in Seattle.

Payroll in New York

A business goal of many international companies is to set up an office in New York. Almost 100 years on from the first promise of the American Dream, New York continues to attract people from all over the world who are seeking opportunities and success. This means there is access to a wide range of skilled labor, and being one of the wealthiest cities in the world, there is certainly access to funding.

That being said, there is a labyrinth of law and legislation to get through before a company can do business in New York. Company-owners who wish to do so must first file an ‘application for authority’ in the Department of State. Those who do manage to get approval and set up their business in New York must contend with somewhat complicated regulations, and high taxes.

Find Out More About International Payroll

For more information to do with international payroll, key considerations and implications abroad, download our international payroll guide today.

Download Our Guide

IRIS FMP’s USA Payroll Solutions

Whether you are looking for payroll in New York, Texas, California or Florida, IRIS FMP can help. We have over 40 years of experience ensuring businesses remain compliant with differing laws and legislation internationally. Take a look at what we can do to help your expanding business:

  • Employment Contracts
  • Payroll Processing
  • Handling of payments (salaries)
  • Annual declarations (lodging, apprenticeship & training taxes for concerned companies)
  • Relations with social bodies
  • Regulatory Compliance
  • Tax and Labor Law Consulting
  • Assisting in payroll audit (or payroll department audit)
  • Handling of confidential payroll
  • Assistance in company restructuring plan
  • Assistance in implementation of procedures
  • Assistance with start-up (in link with lawyers)

Stay Compliant with USA Payroll

IRIS FMP will ensure you remain compliant throughout all stages of your expansion. We’ll support you along every step of the way, so you can get on with the every day.

Start your International Expansion Today