Running payroll in the US involves much more than issuing employee payments. Employers must account for federal, state, and local tax requirements, maintain appropriate payroll schedules, and calculate employee withholdings accurately.
Whether payroll is managed internally or through an external provider, understanding the US payroll process is important for maintaining accurate records and supporting ongoing compliance.
Use our Guide to the US Payroll Process for a practical, step-by-step overview of payroll management, including Federal Unemployment Tax Act (FUTA) requirements, Social Security and Medicare taxes, federal income tax withholding, and Fair Labor Standards Act (FLSA) considerations.
Who should download this guide?
This guide is designed for business owners, HR teams, finance professionals, and payroll managers looking for a clear process for managing US payroll. It can help if you:
- Are beginning to manage US payroll and need to understand compliance requirements
- Find federal income tax, Social Security, and Medicare deductions difficult to navigate
- Need a clearer approach to calculating payroll taxes and employee net pay
- Are considering payroll outsourcing or payroll technology to improve operational efficiency
The US payroll process: Key steps
1. Gather information
Before processing payroll, collect the required business and employee information, including:
- Employer Identification Number and applicable state or local tax registrations
- Employee pay information, including hourly or salary rates, pay periods, and withholding forms
- Employee banking details where direct deposit is used
2. Identify the correct payroll schedule
Payroll frequency may be affected by applicable state requirements and company policy. Common payroll schedules include:
- Weekly: 52 pay periods each year
- Bi-weekly: Every two weeks, generally 26 pay periods
- Semi-monthly: Twice each month, generally 24 pay periods
- Monthly: Once each month, generally 12 pay periods
3. Calculate gross pay and tax withholdings
- Hourly employees: Calculate eligible hours worked using the applicable hourly rate, including overtime where required
- Salaried employees: Divide annual compensation across the applicable number of payroll periods
- Withhold taxes: Calculate federal income tax, Social Security, Medicare, and applicable state or local taxes
- Apply required payroll deductions and voluntary benefit deductions before determining net pay
4. Distribute payroll and maintain records
Employee wages may be paid through direct deposit, paper checks, payroll cards, or supported payroll systems. Employers should also retain payroll records in accordance with applicable FLSA, IRS, and state recordkeeping requirements.
How Komp supports payroll management
Komp connects payroll with broader workforce operations, helping organizations manage payroll information alongside employee records, compliance workflows, reporting, EOR, and contractor management.
With Komp, organizations can:
- Support payroll processes across different workforce structures
- Maintain connected payroll and employee information
- Improve visibility across workforce records, documentation, and reporting
- Coordinate payroll with broader HR, finance, and compliance workflows
- Manage US payroll as part of a wider global workforce operating environment
For growing organizations, bringing payroll and workforce information into a more connected environment can reduce fragmentation and help teams maintain stronger operational visibility.
“As our workforce expanded, connecting payroll information with broader workforce operations gave our finance and HR teams greater visibility and a more consistent way to manage recurring payroll requirements.”
- Director of Payroll Operations
Growth-Stage Technology Company
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