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  • Employer of record
  • Contractor management
  • Global payroll
  • In-country payroll
Global Payroll Team
Written by Global Payroll Team
Last updated May 1, 2026
Expert Reviewed
United States of America map

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Mercans offers complete Global Payroll, PEO and HR services in the U.S

Supported by a regulatory environment generally conducive to starting and operating a business, the U.S. encourages free enterprise. It remains one of the world’s largest investment destinations and consumer markets, although employers must navigate a federal system in which many payroll, labor, tax, and leave obligations also vary by state and locality.

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Doing Business in the U.S

Offering one of the largest consumer markets in the world, the U.S. remains an investment destination of choice. The U.S provides significant support and resources for start-ups through entrepreneurial ecosystems. Businesses entering the U.S. can also utilize soft landing programs that help centralize resources, such as legal or accounting services and mentoring, and facilitate connections.

Entity Registration and Incorporation Requirements

Setting up a new business or expanding an existing one in the U.S. is straightforward. Choose how your company operates from a range of entity types which suit your individual circumstance.

Banking

Banks are open from Monday – Friday 9am-5pm

Working Week

The standard working week is commonly 40 hours per week usually worked from Monday to Friday, 8 hours per day

Labor Law

In addition to federal laws, each state has its own labor law which varies from state to state. Businesses should check state-specific labor law requirements in addition to federal rules. Additionally, the type of workplace issue determines the government agency to get assistance from.

Main Industries

Healthcare, technology, construction, retail, manufacturing

GDP Growth

2.8%

Dates & Numbers

dd/mm/yyyy

Official State Name

United States of America

Population

341.1 million

Capital

Washington D.C

Major Languages

English

Currency

United States Dollar

Internet Domain

.us

International Dialing Code

+1

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United States of America
Washington, US
11:59 pm, May 2, 2026
15°C
clear sky
54 %
Wind Gust: 4 mph
Clouds: 0%
Sunrise: 5:43 am
Sunset: 8:14 pm

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Global Payroll

The U.S. Department of Labor enforces the Fair Labor Standards Act (FLSA) which outlines the federal minimum wage and overtime pay standards. Companies that operate global payroll should take note that many states and localities have their own minimum wage laws. Where an employee is subject to both state and federal minimum wage laws, the employee is entitled to the higher applicable minimum wage.

It is acceptable to provide employees with online payslips

Payslip

Payroll reports must be kept for 3 years under federal FLSA recordkeeping rules

Reports

No federal statutory annual leave entitlement

Annual Leave

No general federal statutory paid sick leave entitlement

Sick Leave

No federal statutory paid maternity or paternity leave. Eligible employees may take up to 12 weeks of unpaid FMLA leave

Maternity & Paternity Leave

Most employment in the U.S. is ‘at will’, subject to contract, collective bargaining, and anti-discrimination rules

Employee Termination

No federal statutory provisions for a 13th month salary

13th month salary

$7.25 per hour federally

Minimum Wage

Paid at one and one-half times the regular rate of pay for nonexempt employees after 40 hours in a workweek

Overtime

No general federal statutory severance pay requirement

Severance Pay

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Tax and Social Security

Business owners need to be familiar with federal, state and local tax requirements. Individuals pay personal income tax to the federal government, many states and some local municipalities. Social Security provides individuals with a source of income when they retire or are unable to work due to disability. The amount of income received depends on a few factors including earnings over a lifetime and the age at which benefits begin to be received.

Tax

The IRS (Internal Revenue Service) is the nation’s tax collection agency which administers the Internal Revenue Code. Tax status is determined by whether an individual is an employee or independent contractor.

21%

Corporate Income Tax

37%

Personal Income Tax

0%

Sales Tax

0%

VAT

Social Security

There are four main types of federal Social Security related benefits: retirement benefits, disability benefits, benefits for spouses or other survivors of a family member who has passed, and SSI (Supplemental Security Income).

15.3%

Social Security Rate

7.65%

Social Security Rate for Employers

7.65%

Social Security Rate for Employees

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Employment Law

The Fair Labor Standards Act (FLSA) mandates that employers pay covered employees who are not otherwise exempt the federal minimum wage and overtime where applicable. The EEOC (Equal Employment Opportunity Commission) enforces federal laws prohibiting employment discrimination. If an individual is wrongly terminated from employment, they may contact their state labor office for more information and check eligibility for unemployment compensation and any extension of their healthcare benefits.

Employment agreement

The FLSA does not define full-time or part-time employment which is generally determined by the employer

Working condition

The Wage and Hour Division of the Department of Labor enforces federal labor laws pertaining to work hours including the federal minimum wage, overtime pay, record keeping and child labor requirements. Alternative work arrangements such as flexible work schedules are generally a matter between the employer and employee, subject to applicable law.

Leaves

Leave benefits, whether paid, unpaid or partially paid, are generally an agreement between the employer and employee or are governed by state or local law. Certain types of leave are required by law while others are voluntarily provided by employers. The FLSA does not regulate vacation, holiday, severance or sick pay, premium pay for weekend or holiday work, pay raises or fringe benefits, or discharge notices.

Employment termination

If an individual loses their job they have certain rights such as the right to continue healthcare coverage and at times the right to unemployment compensation. Employers may be required to provide certain notices to their employees depending on the situation and applicable law.

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N/A

Minimum notice period for terminating an employee

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11 federal holidays

Total number of public holidays

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40

Working hours per week

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No entitlement

Total number of days for Compassionate & Bereavement Leave

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Immigration

Individuals with the right skills and work experience may be able to live and work permanently in the U.S. by seeking an employment-based immigrant visa. If an individual living outside the U.S. wants to work in the U.S. temporarily, they must apply for the appropriate employment-based visa unless a visa is not required.

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Residency permits

Permit conditions and types vary depending on whether the individual is a temporary worker, permanent worker, temporary visitor for business, or student and exchange visitor. Temporary employment-based visa categories and employment authorization documents are governed by federal immigration law and vary by route.

Work Permit validity

Varies by visa or employment authorization category

Required Documents

Passport valid for the required period

Completed visa application form, where applicable

Approved petition or supporting employment authorization filing, where required

Photographs meeting U.S. immigration specifications

Financial support evidence, where applicable

Completed medical examination forms, where applicable

Supporting employer and category-specific immigration documents

Compliant, reliable, error-free and touchless payroll in United States of America

Build the best team and hire top talent compliantly in United States of America. Get in touch with United States of America payroll outsourcing & PEO specialists for a free consultation!

This document was prepared for informational purposes only. As local laws & regulations keeps on changing. Please consult your tax & legal advisors as well.
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    FAQs

    What is an Employer of Record (EOR) in the USA and how does it work for foreign companies?

    An Employer of Record in the United States enables international companies to hire US-based employees without forming a US legal entity. The EOR becomes the legal employer, handling employment contracts, payroll, taxes, social contributions and compliance with federal, state and local employment laws while your company oversees the employee’s day-to-day tasks.

    Why should businesses use an EOR instead of establishing a legal entity in the USA?

    Using an EOR in the United States allows faster entry into the US market, avoids the cost and complexity of entity formation, licensing and multi-state registration. It reduces administrative burdens and risk while ensuring full compliance with US labour, tax and employment regulations.

    How does payroll outsourcing in the USA ensure compliance with tax and labor laws?

    Payroll outsourcing in the United States covers the correct calculation and withholding of income tax, Social Security, Medicare, unemployment insurance and state-level payroll taxes. All payroll filings, reporting and compliance with labour standards and payroll regulations are managed by the EOR, reducing risk of penalties.

    Can an Employer of Record in the USA hire employees and manage work visas for international companies?

    Yes. An Employer of Record in the United States can hire both US nationals and eligible foreign nationals, manage onboarding, I-9 verification, visa sponsorship or work authorisation support where applicable, and ensure compliance with US immigration and employment law requirements.

    What are the main benefits of using EOR and payroll services in the USA for global expansion?

    Key benefits include rapid US market access without establishing a legal entity, reduced administrative and regulatory burden, full compliance with US employment and tax laws, access to local HR and payroll expertise, and flexibility to scale your US workforce efficiently and compliantly.

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