Analysis of Employee Wages in US Payroll using OpenHRMS

The primary thing to consider for an individual planning to settle in the US is the average annual salary for the job. Each employee's basic wages are unique based on the company and profession. Sometimes, it focuses on experience, geographic access, education, experience, and more in the United States. The basic wages of a worker are a vital part of the payslip generated by a firm. In some instances, a few companies face difficulty in configuring wages in the payslip. With the use of HR software, you can make the procedure simpler and easier. OpenHRMS software ensures you configure employee wages and other data in a payslip developed by a US Company.

Components that Affect US Average Salary 

The primary income of Americans is influenced by different factors apart from job type and location. At the individual level, an essential element affects income as per statistics on average American income. Now, let’s view some prospects related to the average salary of US companies and analyze details about each factor affecting the US basic wage.

Job Experience

A salary decision made by a company as on individual job experience in previous companies. The more he/she will get based on higher years of experience. According to the latest research, an average of more than 30% is available to professionals with five years of experience. Salaries for entry-level are relatively lower compared to experienced ones. Those who are promoted to higher positions can access high salaries as per their experience.

Education

Basic salary in the US also determines by the educational background of a person. For example, a college graduate can earn $73892 minimum annually, and who holds a master's degree can attain $179036 per year. 

Age

A gradual hike in salary is visible at the age between 16 and 64. Also, it is caused by industry, skill set, education, and more. Similar to gender, age impacts salary suggested by recent data analysis. According to the research, the weekly wage of men is greater than women. A basic salary of $625 for men and $596 for women is acquirable between the ages of 18-24. Hence, age is a primary factor in determining your salary in the US.

Racial and Gender Groups

As per the National average salary statistics, the income gap is linked with racial division in the United States. We can view high poverty among Hispanics and Afro-Americans. The poverty percentage of non-Hispanic is relatively low in contrast to black Americans and Hispanics. 

Job Role & Industry

The job position and industry are other factors that impact the salary of each person. For instance, a medical degree or software development professional earns a salary six times more than the national average. In contrast, entry-level employees in retail or recreation earn 50% lower. Hence, based on industry, salary will vary among workers in the US.

Basic Wage State-wise in the US

Average wages varies significantly in the United States. Factors affecting personal income include the job market, economic state, and cost-to-profits ratio. Also, the basic salary of each state varies for workers. According to the Bureau of Labor and Statistics, an individual salary determines by age, job profile, geographic location, and living cost. This impact how many employees can access an organization. The high cost of living in states provides enormous salaries. One of the prosperous regions in the United States is the Northeast side.

In 2022, the state with the highest minimum salary is California($15.00). A business with more than 26 employees applies under this wage structure. Three states in which maximum wage is expected in 2023 consist of Connecticut, California, and Massachusetts. The states containing the lowest minimum wage include Wyoming and Georgia($5.15). As per the Economic Policy Institutes Minimum Wage Tracker, the minimum wage across several states in the US is given below.

- Alabama - $7.25

- Alaska - $10.34

- Arizona - $12.80

- Arkansas - $11

- California - $15

- Colorado - $12.56

- Connecticut - $13

- Delaware - $10.50

- Florida - $10

- Georgia - $7.25

- Hawaii - $10.10

- Idaho - $7.25

- Illinois - $12

- Indiana - $7.25

- Lowa - $7.25

- Kansas - $7.25

- Kentucky - $7.25

- Louisiana - $7.25

- Maine - $12.75

- Maryland - $12.50

- Massachusetts - $14.25

- Michigan - $9.87

Types of Wages

It is necessary to make careful consideration before deciding to pay employees in a company. As per the industry, you can offer payment for the employees. Several types of payment methods are exiting in the US to compensate employees. Supplemental and regular wages are the two types of wage categories allowed in the United States. Let’s examine these categories separately below.

Regular Wages

The fixed amount employees earn in each pay period is regular wages. Salary and hourly wages are in the format of regular pay for workers in a firm.

Salary Wages

A regular or fixed payment per year is accessible to employees who earn a salary clearly from the company. We must divide the annual salary by the pay period's number to determine an employee's wages per period. For example, divide the annual salary by 26 if you pay a worker biweekly.

Hourly Wages

The average hourly wages in each industry are different. We can view the highest hourly wages in finance, Construction, Business, Education, and more industries. A change in the paycheck is visible in employees paid hourly based on their varying work hours. You can multiply the number of hours by the hourly rate once you pay employees hourly wages. The average hourly wage of US employees is $11 in 2022.

Supplemental Wages

The non-regular and additional wages you pay for an employee is known as supplemental wages. To compensate employees, we can use various supplemental wages. Few of the supplemental wages are optional, and others are mandatory.

a) Overtime Wages

The overtime laws follow once you have nonexempt employees. Employers must pay extra wages to nonexempt employees who work more than 40 hours in a workweek as per the Fair Labor Standards Act. Overtime pay is paid based on each extra hour worked by an employee in an organization. As per the specific type of business, you can see some variations in certain exemptions.

b) Retroactive Pay

The remuneration you owe a worker from a previous pay period refers to retroactive pay. An employer can provide retro pay for several reasons, such as forgetting to raise the account, regular wage miscalculation, overtime pay failure, and more.

c) Bonus Pay

An additional money provided to the employee more than their wages is a bonus pay. An organization can give bonus pay as a gift or reward. Mostly, a holiday bonus applies to employees in several companies.

Management of employee wages in a payslip configure easily using OpenHRMS. A firm can enhance growth and profitability with the use of an accurate HR management system. The basic wages of workers in a US Company compute easily once installing the OpenHRMS software in your system.