In today's globalized world, more companies are setting up overseas branches or hiring foreign employees. However, compensation systems vary greatly between countries, posing major challenges for payroll management. This article focuses on introducing pay cycles in the United States to help overseas employers better understand the US compensation system and manage foreign staff accordingly.

1. Pay Cycles in the US

Most US companies pay wages every two weeks or monthly. Some choose weekly or quarterly cycles. Generally, pay stubs are issued 1-2 weeks prior to each payday for employee review.

2. Tax System in the US

The tax system is complex with federal, state and social insurance taxes. Federal tax applies to all based on income level. State tax varies by state and some have city taxes. Social insurance tax funds social security and healthcare.

Employers must withhold these taxes from wages and remit to corresponding government agencies when paying staff. Actual take-home pay considers tax deductions.

3. Benefits in the US

Benefits include healthcare, retirement plans, unemployment insurance etc. Healthcare is most significant legally required employer-provided benefit, though coverage levels vary between companies.

Benefits are considered additions to effective income along with tax deductions.

4. Overtime Policy in the US

Overtime refers to hours worked beyond the normal work schedule. By US labor law, hours exceeding 40 per week are paid at 1.5 times regular hourly wage. Overtime pay affects income calculations.

5. Conclusion

The US compensation system is complex across multiple dimensions of pay cycles, taxation, benefits and overtime. Understanding it is important for managing foreign employees. This article aims to assist overseas employers in that regard.