Payrollin the U.S.

Hello, and welcome to our Payroll in the U.S. series. If you're new to the U.S. system, payroll might seem complex and confusing. But don't worry, Orbiss is here to help. In the U.S., payroll isn't just sending salaries. Payroll is a compliance process that connects what you pay your team to tax withholding, tax deposits, and reporting to multiple agencies. So, what happens in a typical U.S. payroll cycle? First, you calculate gross pay, the amount an employee earned for the pay period. Then you withhold certain items from the employee's pay, and you may add employer-paid taxes on top. The most common categories are federal income tax withholding, Social Security tax, Medicare tax, state income tax withholding, in many states, and sometimes local taxes in certain cities or counties. At the same time, employers generally owe additional amounts, like the employer share of Social Security and Medicare, plus unemployment taxes.

Finally, you deposit the withheld taxes and employer taxes on a schedule, and you file payroll reports quarterly and annually. Why is this so different from many other countries? Because the U.S. is decentralized, payroll involves federal rules, but also state and sometimes local rules. And those rules can change depending on where the employee physically works. One last basic concept: payroll is time-sensitive. Missing deposit deadlines or filing deadlines can trigger penalties and interest, even if the payroll calculation itself was correct. In the next video, we'll cover what you need to set up before your first U.S. payroll, including registrations and the key onboarding forms that every employer should know. We'll see you in the next video!

Welcome back. In this video, we'll cover the Before You Run Payroll Checklist, the steps that make payroll possible and keep you compliant from day one.

Step 1 is registering as an employer. At the federal level, you generally need an employer identification number, an EIN, so you can report wages and pay federal payroll taxes. Then, you typically register with each state where you have employees for two separate systems. State income tax withholding, if that state has an income tax, and state unemployment insurance.

Depending on location, you may also need local tax registrations, and you may need workers' compensation coverage, which is required in most states. Now, let's talk onboarding. What you collect from the employee. In the U.S., there are two forms almost every employer will deal with. Form I-9. This is the Employment Eligibility Verification Form. The employee must complete and sign Section 1, no later than their first day of employment, for pay. And the employer must complete Section 2, within two business days. You keep the I-9 on file. You generally do not send it to the government unless you're asked during an audit or inspection.

Form W-4. This tells the employer how to withhold federal income tax from the employee's paycheck. Some states have their own withholding forms as well. Employers generally keep Forms W-4 in their records. They're not routinely filed with the IRS.

Many states also require new hire reporting, basically reporting basic information on newly hired or rehired employees to the state where they work, usually within 20 days. Finally, you'll collect practical payroll inputs. Pay rate and pay type, hourly or salary. Pay frequency, weekly, bi-weekly, semi-monthly, etc. And this is often governed by state payday rules. Direct deposit information or payment method. And a timekeeping process, especially for hourly and overtime eligible employees. One quick but important note, payroll is different for employees versus independent contractors. Employees go through payroll with tax withholding and a W-2 at year-end. Independent contractors are generally paid gross with no withholding and are typically reported on a 1099-NEC, but classification rules are fact-specific, and misclassification can create real exposure.

Next time we'll move from setup into the actual paycheck, how gross pay becomes net pay, and what commonly changes the number in between. We'll see you in the next video.

Welcome back! Now that you're set up, let's walk through what actually happens when you run payroll, the gross-to-net process. Step 1. Confirm the inputs. For hourly employees, that usually means approved hours worked in the pay period, plus any overtime, commissions, tips, or bonuses. For salaried employees, it's usually the salary amount for the pay period. But you still need to capture items like bonuses, commissions, or unpaid leave if applicable. Step 2. Apply wage and hour rules. In the U.S., many employees are entitled to overtime pay unless they meet specific exemption requirements. At the federal level, overtime is generally at least time and one-half for hours worked over 40 in a workweek. States may have additional rules. Step 3. Calculate taxes and deductions. Typical payroll withholding can include federal income tax withholding, based on the employee's W-4 and IRS tables, Social Security and Medicare taxes, state income tax withholding, where applicable, and sometimes local taxes. Then you apply deductions, things like health insurance premiums, retirement contributions, commuter benefits, or wage garnishments. Some deductions are pre-tax and reduce taxable wages for certain taxes. Others are after tax. Step 4. Produce the pay statement and pay the employee. Even if your payroll provider does most of the heavy lifting, make sure you can answer three basic questions every cycle. Did we pay the right people? Did we pay the right amounts and hours? Do the taxes and deductions look reasonable compared to prior payrolls? A helpful habit, especially for international teams, is to save a sample pay stub walkthrough for internal use. That way, when an employee asks, "Why is my paycheck lower than expected," you can point to the exact line, withholding, benefits, or a change in their W-4. In the next video, we'll step behind the paycheck and talk about employer payroll taxes, deposit schedules, and why timing matters just as much as accuracy.

Welcome back. If there's one place international founders and finance teams get surprised, it's here. In the U.S., calculating payroll and paying employees is only half the job. The other half is paying the government, on time, and proving you did it. Let's start with the core employer tax buckets. Most employers deal with Social Security and Medicare taxes. These are withheld from employees and matched by the employer. Federal unemployment tax, called FUTA, and state unemployment tax, often called SUTA. Depending on the state, there may also be state disability insurance, paid family leave contributions, or local employer taxes. Now, timing. Federal employment taxes are deposited on a schedule, typically monthly or semi-weekly, based on IRS rules and your prior payroll tax history. For example, monthly depositors generally deposit taxes for wages paid in a month by the 15th of the following month. Semi-weekly depositors have different deadlines depending on which day wages are paid. Two important practical warnings. First, withheld payroll taxes are trust fund money. That means you're holding it on behalf of the government. It isn't operating cash. Second, failing to pay withheld employment taxes can create personal liability for certain responsible persons, not just the company. How do you actually deposit? In general, federal employment taxes are deposited electronically, either directly by the employer or by a payroll provider that deposits on your behalf. Either way, the best practice is to verify deposits against confirmations every cycle. Finally, don't forget the multi-state reality. If you have employees working in multiple states, you may need payroll tax registrations and unemployment accounts in each state where employees work, and your withholding and unemployment rules can differ state by state. In the final video, we'll cover payroll reporting, the quarterly and annual forms like Form 941 and W-2s, plus a year-end checklist to keep you out of trouble.

Welcome back, and welcome to the part of payroll that feels the most tax season-ish. Running payroll creates a paper trail, and in the U.S., those reports are not optional. They're how you reconcile what you paid, what you withheld, what you deposited, and what each employee will report on their personal tax return. Quarterly, many employers file Form 941, the federal payroll tax return that reports wages and employment taxes. These returns are typically due after each quarter ends, and states often have their own quarterly wage and unemployment filings, too. Annually, most employers have a few key deadlines. Form W-2 for employees. This reports wages and withholding, and it must be provided to employees and filed with the Social Security Administration by the end of January, or the next business day, if that date falls on a weekend or holiday. Form 1099-NEC for independent contractors. Generally due by the end of January as well. And Form 940 for FUTA. Typically due at the end of January, with certain extensions if all FUTA deposits were made on time. Now, record-keeping. Under federal wage and hour rules, employers generally must keep payroll records for at least three years, and keep the records used to compute wages, like time cards and schedules, for at least two years. To wrap up this series, here's a simple compliance checklist you can use as a sanity check, especially if you're managing payroll across borders. Before running payroll, are we registered in the right jurisdictions? Federal, state, local where applicable? Do we have completed onboarding forms, I-9, W-4, and any state forms? Are we tracking time correctly for overtime-eligible employees? Each payroll cycle. Do gross pay, taxes, and deductions look reasonable versus prior periods? Were deposits made on time and do we have confirmations? Quarterly and annually. Are returns filed on time for both federal and state? Are W-2s and 1099s delivered and filed by the deadline? If you want help building a U.S. payroll process that's clean, repeatable, and scalable, especially across multiple states, reach out to your payroll advisor or provider and make sure someone is actively owning the calendar and the controls. Thanks for watching. If you still have questions about payroll or business in the U.S., head to Orbiss.com.