USA

Currency, United States Dollar

337.34 million

Population

19.85 trillion

GDP

6th RANKED

Ease of Doing Business

English

Language

BIWEEKLY

Payroll Cycle
How EOR can help you

Grow your team in the United States

Benefits of hiring in the United States

The USA is one of the world’s largest national economies and a top global trader. The country’s population represents less than 5% of the world, yet Americans earn more than 20% of the world’s total income.

The economy in the United States of America has a highly progressed and state-of-the-art tech services sector, which accounts for nearly 80% of its output.

USA corporations play a major global role, where more than 20% of companies on the Fortune Global 500 list call the United States their home.

The United States of America maintains its powerhouse economic status with access to abundant natural resources, a sophisticated physical infrastructure, and a large, well-educated, productive workforce.

Benefits

USA corporations play a major global role, where more than 20% of companies on the Fortune Global 500 list call the United States their home.

Challenges of hiring in the United States

The USA faces a chronic trade deficit, as imports greatly outweigh the value of American goods and services exported to other countries.

For many Americans, household incomes have stagnated since the 1970s, as household debt has reached record highs.

The United States of America has significantly increasing income and wealth inequalities, which overlap with territorial and racial inequalities.

Challenges

The USA faces a chronic trade deficit, as imports greatly outweigh the value of American goods and services exported to other countries.

Cultural nuances of hiring in the United States

American business culture perceives punctuality as respect. Arriving late to a meeting can reflect poorly on professionalism.

Americans often bring a friendly atmosphere to business culture by introducing humor to meetings and conversations.

Depending on the size and the culture of the specific business, all colleagues present at a meeting are welcome to share their views regardless of age or business hierarchy.

Americans can be uncomfortable with silence during a meeting, and they will likely fill it with discussion.

If disagreement is bluntly shown, it is not negatively reflected on the colleague who shared the ideas. If ideas are negated, do not feel offended.

American colleagues are open and hasty with their communication, seeking to quickly reach a decision.

Americans usually work longer than other cultures, although not usually by choice. There is typically a social pressure not to take leave from work.

If a dispute arises with American colleagues, it is best to speak directly and privately with them to resolve the matter. Discuss the problem in the specific context in which it occurred to avoid it being perceived as a criticism of character.

Cultural nuances

Americans often bring a friendly atmosphere to business culture by introducing humor to meetings and conversations.

mountain scape
Onboarding

Hiring in the United States

  • Employment contracts in the United States

    In the United States, a written employment contract is not required. However, some states have wage theft laws that require employers to inform, in writing, an employee’s compensation and benefits.

    Most states presume at-will employment relationships, permitting employers to dismiss employees without notice and without cause, provided that the reason for the dismissal is not unlawful.

  • Probation periods in the United States

    The United States does not have a statutory requirement for a minimum probation period. However, employers are able to set the probation period between 60 and 90 days. Formal probation periods are quite uncommon in the United States since employment relationships are mostly at-will. At-will employment gives employers the ability to terminate employment without cause at any time, without notice or severance obligation.

Payroll

Easily navigate payroll laws, contributions, and requirements in the United States

APRIL 15

Tax Due Date

In the United States, tax returns must be filed by April 15.

BIWEEKLY

Payroll cycle in the United States

State laws vary regarding the timing of payment for work. Bi-weekly and weekly pay periods are the most common payroll cycles.

40 HRS/ WEEK

Average weekly working hours in the United States

There are no national restrictions on employee working hours in the United States. However, employees typically work 40 hours per week.

  • Minimum wage and salaries in the United States

    The United States of America has a national minimum wage of USD 7.25 per hour. About 30 out of 50 states have minimum wage laws that exceed the national minimum wage. In cases where an employee is subject to minimum wage laws from both the state and the federal governments, the employee is entitled to the higher wage.

  • Bonus payments in the United States

    There is no legal obligation for an employer to provide a bonus to employees. Employers are free to determine the rules of any bonus plans at their own discretion.

  • Overtime in the United States

    Although employee working hours are not restricted, the federal Fair Labor Standards Act (FLSA) requires workers who work more than 40 hours per week to receive overtime payment of 1.5 times their regular hourly wage.

Taxes

Taxes and Social Security in the United States

The USA taxes its residents on their worldwide income, not solely their USA-sourced income. The USA taxes its non-residents on their USA-sourced income alone.

The United States of America tax residency is determined by the length of stay in the country. People are tax residents in the United States of America if they are present in the country for a minimum of 31 days during the current year, in addition to 183 days throughout the three-year term, including the current year and the two previous years prior.

Health benefits in the United States

The USA healthcare system consists of public and private providers. However, the majority of the population receives care through private healthcare companies.

The federal government supplies partial funding to the national health insurance program for adults aged 65 and older, known as Medicare. The federal government also provides partial funding for various programs for veterans and people with low incomes, known as Medicaid and the Children’s Health Insurance Program. Individual states manage and pay for particular features of local health insurance coverage. It is worth noting that the government only provides partial funding, so individuals must cover the remainder to gain access to these healthcare programs.

Private health insurance is the common form of coverage in the United States of America and is predominantly provided by employers. For a majority of Americans, out-of-pocket payments are the primary means of financing their healthcare.

Pension benefits in the United States

Social Security is the United States’ old-age retirement pension. Employees are subject to eligibility requirements as follows:

  • Americans born before 1960 receive Social Security benefits from the age of 65.
  • Americans born after 1960 receive Social Security benefits from the age of 67.
  • Americans are eligible to receive Social Security benefits from the age of 62. However, they can expect a 5-6% reduction in their pension.
  • At least 10 years of work is required to qualify for Social Security benefits. Although, the federal government calculates an employee’s Social Security benefits based on their highest 35 years of earnings. If an employee does not have 35 years of earnings by the time they apply for Social Security benefits, their pension is reduced.

    Tax Thresholds in the United States

    As of 2022, the USA income tax brackets are the following for single taxpayers:

    • Up to USD 10,275: 10%
    • USD 10,276 to USD 41,775: 12%
    • USD 41,776 to USD 89,075: 22%
    • USD 89,076 to USD 170,050: 24%
    • USD 170,051 to USD 215,950: 32%
    • USD 215,951 to USD 539,900: 35%
    • Above USD 539,901: 37%

    As of 2022, the USA income tax brackets are the following for married taxpayers filing jointly:

    • Up to USD 20,550: 10%
    • USD 20,551 to USD 83,550: 12%
    • USD 83,551 to USD 178,150: 22%
    • USD 178,151 to USD 340,100: 24%
    • USD 340,101 to USD 431,900: 32%
    • USD 431,901 to USD 647,850: 35%
    • Above USD 647,851: 37%

    As of 2022, the USA income tax brackets are the following for head-of-household taxpayers:

    • Up to USD 14,650: 10%
    • USD 14,651 to USD 55,900: 12%
    • USD 55,901 to USD 89,050: 22%
    • USD 89,051 to USD 170,050: 24%
    • USD 170,051 to USD 215,950: 32%
    • USD 215,951 to USD 539,900: 35%
    • Above USD 539,901: 37%

    As of 2022, the USA income tax brackets are the following for married taxpayers filing separately:

    • Up to USD 10,275: 10%
    • USD 10,276 to USD 41,775: 12%
    • USD 41,776 to USD 89,075: 22%
    • USD 89,076 to USD 170,050: 24%
    • USD 170,051 to USD 215,950: 32%
    • USD 215,951 to USD 323,925: 35%
    • Above USD 323,926: 37%
    blue ocean with large rocks in background
    Leave

    Leave Entitlements in the USA

    • Annual leave in the US

      American labor law does not have a statutory requirement to pay employees for time off of work for vacation or holidays. According to a report from the Center for Economic and Policy Research, the United States of America is the only advanced economy in the world that does not guarantee its workers paid vacation days and paid holidays.

    • Parental leave in the US

      The USA is the only wealthy country in the world without guaranteed paid parental leave at the national level. Nine states and the District of Columbia have statutory requirements for some degree of paid parental leave.

      A national law called the Family and Medical Leave Act (FMLA) entitles new parents 12 weeks of unpaid leave during a 12-month period to care for a child. However, there are eligibility requirements to qualify for the unpaid leave.

    • Sick leave in the US

      The American labor code does not designate employers to provide paid sick leave for employees.

      A national law called the Family and Medical Leave Act (FMLA) entitles eligible employees to 12 weeks of unpaid leave in a 12-month period for serious health conditions, which make employees unable to complete the essential functions of their job.

    • National and regional holidays

      The United States has 11 annual national public holidays. The following are national holidays recognized by all of the United States:

      • New Year’s Day (January 1)
      • Martin Luther King’s Birthday (third Monday in January)
      • President George Washington’s Birthday (third Monday in February)
      • Memorial Day (last Monday in May)
      • Juneteenth National Independence Day (June 19)
      • Independence Day (July 4)
      • Labor Day (first Monday in September)
      • Columbus Day (second Monday in October)
      • Veterans’ Day (November 11)
      • Thanksgiving Day (fourth Thursday in November)
      • Christmas Day (December 25)

      Holidays are designated by each state. They can recognize more holidays than determined by the national government.

    Benefits

    Employment benefits in the United States

    The Department of Labor administers national laws governing occupational safety and health, wage standards, and unemployment benefits.

    The Department of Health and Human Services oversees and administers national programs which protect Americans’ health, such as Medicare, Medicaid, and the Children’s Health Insurance Program. These programs are national health insurance schemes for anyone aged 65 and older, people with limited income, people with disabilities, and children in families that earn too much money to qualify for Medicaid.

    The Social Security Administration (SSA) administers the country’s national social insurance program, including old-age retirement pensions, pensions due to death, disability benefits, and survivor benefits.

     

    Termination

    Termination and notice period in the United States

    The employment relationship is at-will in the United States, which means employers and employees can terminate the employment relationship with no notice, provided it is not for an unlawful reason. However, employment contracts and agreements have the ability to specify a notice period, if agreed upon between employer and employee.

    There is no legal obligation in the United States for employers to offer severance payments to employees. However, employment contracts and agreements have the ability to specify a severance payment benefit, if agreed upon between employer and employee.

    Employers are not required by national law to immediately give former employees their final paycheck. However, states have various laws concerning when an employee needs to receive their final paycheck after termination.

    FAQ

    • What is an employer of record in the United States?

      An employer of record (EOR) in the United States is a third-party organization that becomes the full legal employer of your in-country workforce. The EOR compliantly handles employer-related responsibilities like onboarding, pay, and benefits while enabling you to continue managing the day-to-day operations of your team.

    • How does EOR in the United States help hire talent?

      Our EOR solution enables you to hire in all 50 U.S. states and any of 185 other countries without going through the complexities and restrictions of setting up a legal entity. Velocity Global acts as the legal employer, hiring your new team members through local, compliant employment contracts—you get back the time and flexibility to focus on your growing business.

    • Can an EOR run payroll in the United States?

      When you work with Velocity Global’s EOR solution, our experts compliantly handle all payroll and benefits for each of your team members across all 50 U.S. states.

    Get a global perspective with our resources

    American skyline with park in foreground.
    Blog

    A Guide to Hiring Employees in the U.S. From Another Country

    The U.S. is an opportunistic location for foreign companies to explore new markets, target
    Read this Blog
    Mother and daughter engaging with a doctor
    Blog

    How to Provide Health Insurance for Employees in Different States: A Guide to U.S. Healthcare for a Distributed Workforce

    Building a distributed workforce across the United States grants businesses many perks, including
    Read this Blog
    Business people meeting in an office to discuss business plans and goals.
    Blog

    The Complete Guide to Employee Cost: How to Calculate the Cost of an Employee

    Calculating actual employee cost is a critical factor for making sound financial decisions, no
    Read this Blog
    Countries
    More Countries We Serve

    Click on the countries below to learn more about a new market.

    Help your team reach its fullest potential

    Mountain Scenery
    Man writing on tablet