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in the global top tier for payroll complexity for the first time. Managing payroll in the U.S. requires mastering 51 distinct systems, covering all 50 states and the District of Columbia, each with its own rules for income tax, wage thresholds, overtime, pay frequency, leave programs, deductions and garnishment protections. For organizations operating across multiple states, that complexity escalates quickly. A business with employees in only a few jurisdictions is effectively managing several parallel payrolls, each with different filing schedules, tax rates, and compliance obligations. The GPCI shows that complexity is not evenly distributed across states, and that disparity is where payroll risk most often emerges, including overpayments, missed deductions, back pay, and penalties for late or incorrect filings. California ranks as the most complex state in the country, combining nearly every major payroll challenge within a single jurisdiction. Progressive income tax sits alongside State Disability Insurance and Paid Family Leave deductions, while mandated city-level minimum wages, daily overtime and
knowledge. Changes in data privacy laws, contribution models, and statutory benefits continue to raise the standard for compliance, increasing the consequences of error. As a result, the challenge for organizations is not to eliminate complexity, but to understand where it is greatest, manage risk proactively, and build payroll operations that can scale with confidence. This dynamic is particularly visible in the United States, where regulatory fragmentation and state-level variation combine to create one of the most demanding payroll environments globally. The U.S. Reality: One Country, 51 Payroll Systems Our North America 2025 Global Payroll Complexity Index (GPCI) places the United States
California ranks as the most complex state in the country, combining nearly every major payroll challenge within a single jurisdiction.
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GLOBAL PAYROLL MAGAZINE ISSUE 20
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