Payroll and benefits guide
United States
CapitalWashington, D.C.
Fiscal Year1 January - 31 December
Date Formatmm/dd/yyyy
CurrencyUSD (United States Dollar)
Payroll FrequencyBi-weekly
Employer Taxes7.65% + unemployment taxes
Employee Costs7.65% – 8.55%
Overview
- Languages
- English
- Income tax
- 10% – 37% (federal)
- VAT
- No federal VAT
- States and localities set their own sales tax; a few states have none
Contributions
Employer
6.2%
Social Security (FICA)On wages up to USD 184,500 (2026)
1.45%
Medicare (FICA)No wage cap
6% (0.6% net)
Federal unemployment (FUTA)On the first USD 7,000 per employee; up to 5.4% credit for state unemployment tax paid
Varies
State unemployment (SUTA)Rate and wage base set by each state and the employer's experience
Varies
Workers' compensationRequired in almost every state; premium depends on job risk
7.65% + unemployment taxes
Total employer cost
Employee
6.2%
Social Security (FICA)On wages up to USD 184,500 (2026)
1.45% – 2.35%
Medicare (FICA)Plus 0.9% Additional Medicare Tax on wages above USD 200,000
Varies
State payroll deductionsSome states require disability or paid family leave contributions
7.65% – 8.55%
Total employee cost
Minimum Wage & Working Hours
- Minimum wage
- USD 7.25 / Hourly
- Federal minimum under the Fair Labor Standards Act (FLSA). Many states and cities set higher minimums, and the employee gets the highest applicable rate
- Standard working hours
- 40 hours per week
- Overtime
- Non-exempt employees earn 1.5 times their regular rate for hours over 40 in a workweek; some states also require daily overtime
Leave
- Annual leaveNo federal requirementMost employers offer paid time off by policy
- Sick leaveNo federal requirementMany states and cities mandate paid sick leave
- Parental leaveUp to 12 weeks unpaid (FMLA)Job-protected leave for employees with 12 months of service and 1,250 hours worked, at employers with 50+ employees; several states run paid family leave programs
- Public holidays11 federal holidaysPrivate employers are not required to give paid holidays
Termination
- Probation period
- Not required by law; 90 days is common by policy
- Notice period
- None at federal level; employment is at-will in most states
- Severance pay
- Not required by federal law; usually set by company policy or a separation agreement
- 13th salary
- Not mandatory
- Notes
- The WARN Act requires 60 days' notice for certain mass layoffs and plant closings; some states add their own rules
Benefits
- Health insuranceCommon
Employers with 50+ full-time equivalent employees must offer affordable coverage under the Affordable Care Act or face penalties
- 401(k) retirement planCommon
Often with an employer match; some states require employers to offer a retirement plan or join a state program
- Paid time offCommon
Vacation and holiday pay set by company policy
Visas & Work Permits
H-1B specialty occupation
- Duration
- Up to 6 years
- Requirements
- Bachelor's degree or equivalent in a related field; subject to an annual cap and lottery for most employers
L-1 intracompany transfer
- Requirements
- At least 1 continuous year with a related company abroad in the last 3 years
O-1 extraordinary ability
- Requirements
- Evidence of sustained recognition in the field
FAQ
Sources
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