Back

Payroll and Benefits Guide United States – Federal

Last updated: May 23, 2022

Currency
Unknown
Employer Taxes
8.25% - 13.65%
Payroll Frequency
Unknown
Employee Costs
8.55%
Capital
Unknown
Date Format
Unknown
Fiscal Year
Unknown
video poster

Contributions

Employer

Employer Payroll Contributions

8.25% – 13.65% Total Employment Cost
6.20% (Maximum taxable wages is 147,000 USD) FICA Social Security (Federal)
1.45% FICA Medicare (Federal)
0.60% -6.00% (Maximum taxable wages is 7,000 USD) FUTA (Federal Unemployment Tax Act) The FUTA tax rate is 6.0% with a taxable wage base of 7,000 USD. However, if states operate their unemployment insurance programs in compliance with federal law then the FUTA tax is reduced (credit) by 5.4% to 0.6%.Employee

Employee

Employee Payroll Contributions

7.65% – 8.55% Total Employee Cost
6.20% (Maximum taxable wages is 147,000 USD) FICA Social Security (Federal)
1.45% FICA Medicare (Federal)
0.90% Additional tax on earnings over 200,000 USD (High-income earners also pay an additional 0.90% in Medicare taxes)

Employee

Employee Income Tax

Federal Income Tax For Single Filers
10.00% Up to 10,275 USD
12.00% 10,276 USD to 41,775 USD
22.00% 41,776 USD to 89.075 USD
24.00% 89,076 USD to 170,050 USD
32.00% 170,051 USD to 215,950 USD
35.00% 215,951 USD to 539,900 USD
37.00% 539,901 USD or more
Federal Tax – Married, filing jointly
10.00% Up to 20,550 USD
12.00% 20,551 USD to 83,550 USD
22.00% 83,551 USD to 178,150 USD
24.00% 178,151 USD to 340,100 USD
32.00% 340,101 USD to 431,900 USD
35.00% 431,901 USD to 647,850 USD
37.00% 647,851 USD or more
Federal Tax – Heads of Households
10.00% Up to 14,650 USD
12.00% 14,651 USD to 55,900 USD
22.00% 55,901 USD to 89,050 USD
24.00% 89,051 USD to 170,050 USD
32.00% 170,051 USD to 215,950 USD
35.00% 215,951 USD to 539,900 USD
37.00% 539,901 USD or more
Standard Deduction and Personal Exemption
Single 12,950.00 USD
Married Filing Jointly 25,900.00 USD
Head of Household 19,400.00 USD

Minimum Wage

General

The federal minimum wage is $7.25 per hour for employees that are covered by the Fair Labor Standards Act. However, it is possible that an employee is also subject to the state’s minimum wage laws in which case, the employee is entitled to the higher of the two.

MINIMUM WAGE (PER MONTH)

Highest
Lowest

Payroll

Payroll Cycle

State laws vary concerning the timing of payment after a pay period ends and payment in light of holidays and weekends, as well as requiring specific paydays.

The majority of states require payment of wages semimonthly; however, some states allow for monthly payment of wages, while other states require weekly payment.

13th Salary

A 13th-month salary is not required.

Working Hours

General

In the US, a full-time employee is typically engaged for a 40-hour workweek. Part-time employees are classified as employees who work less than 30 hours a week. In addition, part-time employees are not entitled to medical benefits.

Overtime

Nonexempt hourly employees must be paid one-and-a-half times their regular rate of pay for all hours worked over 40 in a workweek. Employers are not required to pay overtime for work on Saturdays, Sundays, holidays, or regular days of rest, unless overtime is worked on such days.

FLSA provides an exemption from both minimum wage and overtime pay for employees employed as bona fide executive, administrative, professional and outside sales employees. They should also meet the minimum salary threshold to qualify as exempt.

A few states require that employers provide employees with a day of rest each week and/or compensate them at a premium rate for work performed on the seventh consecutive day of work.

Working Week

Monday-Friday

Leave

Paid Time Off

In general, there is no statutory requirement to pay employees for time off for vacations or holidays.

Vacation Days
Public Holidays
Highest
Lowest

Public Holidays

There are 10 federal holidays in the United States and there are 9 US Stock Exchange holidays that are observed annually.

The federal Fair Labor Standards Act does not require employers to pay their employees for time not worked, such as holidays. The same is true in the vast majority of states. These benefits are generally a matter of contract between the employer and the employee.

Sick Days

The Family Medical Leave Act (FMLA) provides certain employees with up to 12 weeks of unpaid, job-protected leave per year or certain family and medical reasons (maternity leave, serious illnesses, or if the employee needs to care for a spouse or child). Employers are required to maintain the employees’ health benefits during their leave and keep their job open.

Employees are eligible for leave if they have worked for their employer at least 12 months, at least 1,250 hours over the past 12 months, and work at a location where the company employs 50 or more employees within 75 miles. Whether an employee has worked the minimum 1,250 hours of service is determined according to the Fair Labor Standards Act principles for determining compensable hours or work.

Many states will have additional Family, Medical, Maternity, and parental leave that will either work concurrently with FMLA leave or in addition.

Maternity Leave

Falls under the FMLA. See Family Care Leave for more information.

PAID MATERNITY LEAVE (DAYS)

Highest
Lowest

Paternity Leave

Falls under the FMLA. See Family Care Leave for more information.

Parental Leave

Falls under the FMLA. See Family Care Leave for more information.

Termination

Termination Process

When dismissing a worker, the employer has a responsibility to ensure federal, state, and city ordinances are followed when off-boarding an employee. Some jurisdictions will impose a penalty if the following items are not processed as per the jurisdictions’ timeframe, including providing the employee a termination/unemployment notice, processing final pay, and ensuring a worker’s COBRA (benefit) information is processed.

Notice Period

Employees are employed ‘at will’ and U.S. law does not require a formal notice period to terminate an individual employee. Therefore, either party can terminate the employment relationship with no notice.

In mass dismissal cases the Worker Adjustment and Retraining Notification Act (WARN Act) must be followed and employers must give 60 days’ notice to impacted employees.  There are a number of states which have their own provisions for mass layoff which go above the federal requirement.

Severance Pay

There is no requirement for severance pay and it is a matter of agreement between an employer and an employee. Employers who choose to offer severance would need to have the provisions within the employee’s contract and agreed by both parties.  Some employers choose to offer severance based on their employee’s length of service as an example.

Common Benefits

General

  • Life insurance
  • Short term disability

VISA

VISA

To get a temporary US work visa, an employer must file a petition with U.S. Citizenship and Immigration Services (USCIS). An approved petition must be part of the visa request.

Types of visas include:

H-1B – for applicants with a college degree hired to do specialized work. The visa is valid for 3 years and can be extended for an additional 3 years. The visa is connected to the employer that filed the petition. If there is a change of employer, the process must be repeated. There are 65,000 H-1B visas available each year.

H-1B1 – for applicants with a college degree from Chile and Singapore. The US government grants up to 1,400 visas to Chile citizens and 5,400 from Singapore each year.

H-2A – for temporary or seasonal agriculture work. Limited to citizens of particular qualified countries. Usually valid for up to 1 year and can be extended to a maximum of 3 years.

H-2B – for temporary non-agricultural work. Limited to citizens of particular qualified countries. Usually valid for up to 1 year and can be extended to a maximum of 3 years.

L – for intercompany transfers (people transferred from a foreign company to a US branch of the company.) Must have been employed at the company for a year before the transfer, and work in a managerial level position or higher with specialized knowledge.

0 – for people with extraordinary ability in science, arts, education, business, or athletics.

For those seeking employment based immigrant visas:

E-1 – Highest priority employment for those with extraordinary ability in science, arts, education, business, and athletics.

E-2 – for those with advanced degrees or exceptional ability.

E-3 – for skilled workers and professionals, as well as unskilled workers.

E-4 – Members of certain immigrant groups.

E-5 – Immigrant investors in US companies (substantial investment).

VAT

General

There is no federal VAT.

Companies looking to hire in the U.S without a foreign subsidiary can check out our full U.S payroll service.

Stay up to date on payroll & employment law changes

Version History

May 23, 2022
Payroll contributions and personal income tax rates have been updated.
More

Questions & Answers

Subscribe
Notify of
guest
2 Comments
Oldest
Newest Most Voted
Inline Feedbacks
View all comments
Carly H.
Carly H.
3 years ago

Can you carry over unused paid leave? 

Emily Kuhnert
Emily Kuhnert
3 years ago
Reply to  Carly H.

In general, there are no laws regarding paid annual vacation in the United States. If paid leave is given to an employee, it is generally outlined in the employment agreement or company policy. This usually will include provisions such as how paid vacation must be used.

Download this guide to read later

Payroll and Benefits Guide in United States – Federal

Download Free Guide

See how Papaya can help you automate your global payroll or EoR whilst staying 100% compliant with local labor laws

The information provided in the Papaya Global Web site is provided for informational purposes only. The materials are general in nature; they are not offered as advice on a particular matter and should not be relied on as such. Use of this Web site does not constitute a legal contract or consulting relationship between Papaya Global and any person or entity. Although every reasonable effort is made to present current and accurate information, Papaya Global makes no guarantees of any kind. Papaya Global reserves the right to change the content of this site at any time without prior notice. Papaya Global is not responsible for any third party material that can be accessed through this Web site. The materials contained on this Web site are the copyrighted property of Papaya Global unless a separate copyright notice is placed on the material. Papaya Global grants each user a non-exclusive, non-transferable license to access and download, display and print one copy of the content of this Web site on a single computer solely for internal, business use, provided that the user does not modify the site content in any way and that all copyright and other notices displayed on the site content are retained. Other reproduction, distribution, republication and re-transmission of materials contained within this Web site require Papaya Global’s prior permission.
Download this guide to read later

Payroll and Benefits Guide
in United States – Federal

What’s covered in this guide:

  • Employer/employee contributions
  • Minimum wage
  • Working hours
  • Visa requirements

And more...

Download free guide
All questions are answered by our in-house compliance department working in conjunction with our local in-country partner for this specific country

Public Holidays Calendar

United States – Federal 2022
Download:
CSV
PDF
ICS
Day Date Holiday Notes
Saturday Jan-1 New Year's Day
Wednesday Feb-22 Martin Luther King Day
Wednesday Feb-22 President's Day
Wednesday Feb-22 Memorial Day
Wednesday Feb-22 Juneteenth
Thursday Apr-7 Independence Day Observed
Monday May-9 Labor Day
Monday Oct-10 Columbus Day
Friday Nov-11 Veteran's Day
Wednesday Feb-22 Thanksgiving
Wednesday Feb-22 Christmas Day Observed