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

Authority Payments

Authority Payment
Federal income tax withholding, Social Security, and Medicare
Paid To
Internal Revenue Service (IRS)
Due Date
Monthly or semiweekly deposits, based on the employer's lookback period; Form 941 quarterly
Method
Electronic deposit through EFTPS
Authority Payment
Federal unemployment (FUTA)
Paid To
Internal Revenue Service (IRS)
Due Date
Quarterly deposits when the liability exceeds USD 500; Form 940 annually
Method
Electronic deposit through EFTPS
Authority Payment
State income tax and state unemployment
Paid To
State revenue and labor agencies
Due Date
Varies by state
Method
State online portals

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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