Payroll and HR Compliance
in the US

If you have employees or contractors in the US, it’s not enough to simply pay them on time — you must also comply with strict tax and labor laws. Otherwise, penalties and issues with the IRS are only a matter of time.

At SMAR Global, we handle every aspect of payroll, taxes, and HR documentation — so you can focus on growing your business instead of managing paperwork.

Many companies assume payroll is a straightforward task — but in reality, it requires accuracy, compliance, and timely execution:

Different rules across states: Each state has its own tax rates and reporting requirements.

State registration: You must register with the local tax authority before paying employees in that state.

Incorrect W-2 or 1099 classification: The IRS monitors whether individuals are properly classified as employees or contractors.

Filing deadlines and form accuracy: Missing or incorrect forms may result in penalties of $290 per form.

Late tax payments: Delays can lead to penalties of up to 25% of the owed amount.

Inactive or missing EINs: Even if payroll is processed, failure to register correctly may put your business in violation.

Our services include

Our payroll service covers the entire cycle — from onboarding new employees to filing all required tax forms and processing payments. Depending on your needs, we can support either the full cycle or specific parts of it.

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Why This Service Matters

Accurate and timely payroll processing in full compliance with IRS and state regulations

Reduced risk of penalties and errors through automation and deadline tracking

Guaranteed compliance with legislation across all 50 states

Unified system for managing both employees (W-2) and contractors (1099)

Time-saving solution — full-service payroll and reporting, handled end-to-end without the headache

Our Expertise in This Area

We have deep expertise in US payroll and support companies with distributed teams, complex hiring and incentive schemes, and significant tax exposure.

Our experience covers both full-time employees and contractors, including all compliance nuances related to Forms 1099 and 1096.

We regularly work with companies that operate in multiple states, accounting for local tax rules, insurance requirements, and rate variations.

We advise on how to structure relationships with independent contractors to avoid tax risks and penalties.

Our payroll processes have successfully passed insurance audits, proving their accuracy and transparency.

We understand the tax implications and labor law specifics when handling such schemes — especially in tech companies.

For clients working with independent contractors, we handle annual filing, 1099 form preparation, IRS compliance, and residency tracking.

We also support businesses with long-term incentive plans (e.g., vesting) and know how to reflect them properly in payroll and tax reporting.

How We Work

Payroll service at SMAR is more than just automated payouts — it’s a structured process that covers every step: from system setup and data collection to tax filings and strategic tax planning. We ensure not only accurate payroll but also regulatory compliance and tax protection for your business.

We follow a clear and proven workflow:

Initial Audit and System Setup

We start by analyzing your team: identifying where employees and contractors are located, how contracts are structured, and whether bonuses, stock options, or other specifics apply.
This helps us establish a correct and consistent payroll logic from the outset.

We then configure your payroll program, integrate it with accounting systems or CRM, set up pay components and deductions, and define payout frequency (weekly, bi-weekly, or monthly).

Payroll Calculation

In each pay period, we collect data on hours worked, leaves, bonuses, sick days, and other variables.
Based on this, we calculate accurate wages and applicable taxes.

All calculations are fully documented and available for review.

Withholding Tax and Remittance

After payroll is processed, we automatically withhold taxes and mandatory contributions (Social Security, Medicare, insurance, etc.) and remit them to the proper agencies.

We monitor rate updates and deadlines to eliminate penalty risks.

Reporting and Form Filing

We handle the timely filing of all tax forms — quarterly and annual reports, including W-2, W-3, 1099, and 1096, as well as New Hire Reporting.

You can be confident everything is submitted accurately and on time.

Consulting and Tax Planning

We don’t just process payroll — we advise on structuring payroll processes, onboarding employees and contractors, identifying risks, and staying ahead of regulatory changes.

We pay special attention to eCommerce and IT companies, where flexibility and IRS-compliant structures are key.

Why Work With Us?

Running payroll in the US is not just a mechanical process of issuing paychecks. It’s a matter of legal responsibility, strict deadlines, and complex reporting to government agencies. We help businesses eliminate the burden of this function — making payroll transparent, timely, and fully compliant with the law.

Our team understands how the US system works from the inside — we know the federal and state-level tax and labor regulations. This allows us to confidently support clients in more complex scenarios, including different hiring formats (W-2, 1099), international payouts, and remote teams.

We specialize in multistate operations — registering in the right states, ensuring timely filings, and complying with local laws is part of our responsibility. If additional compliance support is needed, we coordinate with legal and tax experts to ensure full coverage.

We have a strong focus on the needs of eCommerce and IT businesses. These clients often face unique challenges: seasonal employment shifts, distributed teams across countries, flexible compensation models, stock options, bonuses, part-time contracts. We don’t just “run payroll” — we understand your business, which allows us to design payroll as part of your strategy, not in isolation.

Our key strength is the ability to forecast tax burden in advance.

We help business owners make smart hiring decisions: where it’s more cost-efficient to hire, how to onboard correctly, what costs to include in the budget, and how to avoid penalties. We model scenarios in advance — so you feel in control.

We use reliable automation tools — Gusto, QuickBooks Payroll, Paychex, Bill.com, Justworks, and more.

We adapt them to fit your business model and support you at every stage: from onboarding to quarterly analysis.

And finally — working with us is simple and reliable.

You always know who handles your data. We keep you informed, remind you of deadlines, support you during audits, and answer your questions directly — no scripts, just real expertise.

Payroll stops being a headache and becomes a seamless, built-in part of your business operations.

Frequently Asked Questions

Yes. Even if your company is registered outside the US, you are required to register as an employer in the state where the employee works, as well as with federal tax authorities. We help with the registration and ensure payroll is launched correctly in the US

Each state has its own income tax rates, unemployment taxes (FUTA & SUTA), insurance requirements, and filing frequency. We track state-specific requirements, filing deadlines, and tax payments for each jurisdiction.

Generally, you are not required to withhold or pay US taxes for foreign (non-resident) contractors working outside the US However, you must collect and store Form W-8BEN to confirm their non-resident status. We organize this process and provide clear instructions.

No. If a contractor is non-resident and performs work outside the US, Form 1099 is not required. However, if W-8BEN is missing or incorrectly filled, the IRS may require tax withholding. We make sure all documents are collected and properly filed.

• Quarterly: Form 941 (federal payroll tax), and individual state reports
• Annually: Forms W-2 and W-3 (employees), 1099 and 1096 (contractors), Form 940 (federal unemployment tax)
We monitor all deadlines and ensure full compliance to avoid penalties.

We account for RSUs, stock options, and performance bonuses. These are taxable and require precise payroll handling based on vesting schedules and recipient status. We work with legal and accounting professionals to ensure accuracy.

Yes, you can use Stripe, Wise, or Payoneer to pay salaries — but there are important limitations, especially when it comes to actual employees (not independent contractors). Here’s a brief breakdown:
For contractors (independent contractors, freelancers):
Stripe, Wise, and Payoneer can be used without restrictions. You simply send a service payment — just make sure to keep proper documentation and file Form 1099-NEC for tax reporting (if the contractor is US-based).
For employees:
In the US, employee wages must be processed through a formal payroll system that:
withholds all applicable taxes (federal, state, Social Security, Medicare);
files reports with the IRS (Forms W-2, 941, etc.);
ensures compliance with state laws and ACA (health insurance, etc.);
and handles FUTA and SUTA contributions.

Stripe, Wise, and Payoneer do not handle any of these withholdings or filings, so they cannot be used as your main payroll method for US employees.

However, they can be used in conjunction with a proper payroll provider (e.g., Gusto, ADP, Paychex, etc.) that calculates taxes and sends the funds through a third-party payment platform — if that setup is supported.

Late filing may result in IRS penalties, interest, or EIN suspension. States may also impose fines or revoke licenses. We monitor deadlines and notify you in advance.

Yes. We calculate the full cost of employment in the U.S. (or any other country), including federal, state, and local taxes, unemployment contributions (FUTA/SUTA), Social Security, Medicare, benefits, etc.
We also consider additional expenses such as health insurance, pension plans, bonuses, and paid leave.
We have international experience and know how to calculate personnel costs across multiple jurisdictions.This is especially valuable for companies with distributed teams or global operations.

Yes. Record retention is mandatory:
W-4, I-9, and payroll data: at least 4 years
Pay and deduction records: minimum 3 years (DOL requirement)
I-9 forms: 3 years from hire date or 1 year after termination (whichever is later)
Records can be stored either in paper or electronic form, as long as data accessibility and security requirements are met.

Yes, HR compliance requirements apply equally to both in-office and remote employees.
The employer must: formally document the hiring process, track working hours (for hourly employees), and comply with the labor laws of the state where the employee is located — not just where the company is registered.

An employee is a staff member for whom the company withholds taxes and files Form W-2.
An independent contractor is a self-employed professional paid under a contract, reported via Form 1099-NEC. Misclassification can lead to penalties and back taxes.

Yes. Employers must:
Track paid and unpaid leave

Comply with sick leave laws in applicable states (e.g., CA, NY)

Monitor non-working days to ensure proper pay calculation
Holiday pay is not legally required unless specified in internal policies or contracts, though many companies include it as a benefit.

Not legally required, but highly recommended. A written offer helps clarify:
Position, compensation terms, working hours
Benefits and special conditions
Employment contracts aren’t mandatory but are useful for key roles or non-standard agreements.

Technically yes — but only partially and under certain conditions.
Under US labor law, base wages (i.e. minimum wage, overtime, etc.) must be paid in “legal tender” — meaning US dollars.
This is required to comply with federal regulations (Fair Labor Standards Act, FLSA) as well as state laws.
Cryptocurrency may only be used as additional compensation, such as:
a bonus,
a performance award,
stock option equivalent,
or other form of variable compensation.
This approach is used by some tech companies, particularly in Web3, fintech, and startup environments.
What you need to keep in mind:
The full amount of crypto-based compensation must be valued in USD at the time of payment and included in the taxable income.
Employers are required to withhold taxes (federal, state, FICA) on the full amount — even if part of it is paid in cryptocurrency.
Such payments involve additional accounting complexity and W-2 reporting, as the IRS requires the value of crypto to be fixed at the moment it is granted.
In some states (e.g. California, New York), stricter regulations apply — special caution is advised when offering compensation in crypto.

Book a Free Consultation

Let’s schedule a free introductory call (15–30 minutes) to discuss your needs, answer your questions, and explore possible ways to work together.


No obligations — just a conversation to explore ideas together.