Need to hire US employees from your Israeli startup? Learn how to set up US payroll, handle tax withholding, choose a payroll provider, and stay compliant.

# Setting Up US Payroll as an Israeli Startup: A Complete Guide

Canonical URL: https://www.alephaccounting.co/blog/us-payroll-for-israeli-startups

As your Israeli startup grows, you'll likely need to hire US employees. Setting up payroll correctly is essential.

## What US Payroll Involves

### Employee Withholding
- Federal income tax, Social Security (6.2%), Medicare (1.45%), state and local taxes

### Employer Taxes
- Matching Social Security and Medicare, FUTA (6% on first $7,000), SUTA, workers' comp

## Recommended Payroll Providers

- **Gusto**: Best overall. $40/month + $6/employee. Handles all taxes and benefits.
- **Rippling**: All-in-one HR + payroll. $8/employee/month.
- **Deel or Remote**: Best for managing US and Israeli employees from one platform.

## Step-by-Step Setup

1. **Register for state taxes**: Withholding, unemployment, workers' comp
2. **Set up payroll provider**: EIN, state tax IDs, bank account
3. **Collect employee forms**: W-4, I-9, state W-4, direct deposit
4. **Set pay schedule**: Bi-weekly most common
5. **Run first payroll**: Enter salary, review taxes, approve

## Cost Estimate: First US Employee

| Item | Monthly Cost |
|------|-------------|
| Salary (example) | $8,000 |
| Employer taxes (~10%) | $800 |
| Health insurance | $500-$800 |
| Payroll provider | $46 |
| Workers' comp | $50-$200 |
| **Total** | **~$9,400-$9,850** |

## Common Mistakes

- Misclassifying employees as contractors
- Not registering in all required states
- Missing payroll tax deadlines

## How Aleph Accounting Helps

Payroll provider selection, state registration, ongoing compliance, W-2/1099 prep, and accounting integration.

## Frequently asked questions

### What US Payroll Involves?

Employee Withholding - Federal income tax, Social Security (6.2%), Medicare (1.45%), state and local taxes