Payroll Tax in American Samoa: Guide for Global Employers

If you’re here, you’re thinking about hiring in American Samoa. Maybe you’ve found the perfect engineer, or maybe the location just syncs up to your goals. Whatever the reason, you’ve got laws to learn, work authorizations to figure out, and the question of EOR or local entity. At least payroll will be easy, right?

Sadly, that question is just answered with more questions: What do you withhold? What do you owe as the employer? Which forms do you file? 

It feels a lot less like a standard U.S. setup and more like a foreign country.

Here’s the good news—we’ll walk you through everything you need to know to run compliant payroll in American Samoa. 

Let’s get started.

What makes American Samoa payroll different from that of a U.S. state

It is easy to assume things work like any U.S. state—it does not.

Three differences matter most:

• American Samoa operates its own tax system under territorial authority. You are not remitting income tax to a U.S. state revenue department.
• If wages are subject to Samoa income tax withholding, you report them on Form W-2AS, not a standard Form W-2.
• Form 941-SS was discontinued for quarters after 2023, and employers now file Form 941 beginning with the first quarter of 2024.

If your payroll system treats American Samoa like California or Texas, you can easily select the wrong wage statement or the wrong quarterly return.

Small checkbox, big consequence.

A real-world example

Here’s a breakdown for a hypothetical employee making US$3,000 per month.

Employee withholdings

On a gross monthly salary of US$3,000, the following deductions apply to the employee:

• Social Security at 6.2%: US$186 
• Medicare at 1.45% of all wages: US$43.50 
• American Samoa income tax: amount varies, approximately US$375

That leaves an estimated net pay of US$2,395.50, roughly 80% of gross. The FICA portion is fixed and predictable, while the territory income tax varies by filing status and declared allowances, so actual take-home pay will differ by employee. Walk new hires through the calculation during onboarding so the first payslip arrives as a confirmation rather than a surprise.

Employer-paid payroll taxes

On the same US$3,000 gross monthly salary, the employer funds the following separately:

• Employer Social Security at 6.2%, matching the employee contribution dollar for dollar:  US$186 per month
• Employer Medicare at 1.45%, also matching the employee:  US$43.50 per month
• Federal unemployment tax (FUTA), reported annually on Form 940: 6% on the first US$7,000 of each employee's annual wages, reduced by credits for timely state or territory unemployment contributions, bringing the effective rate typically to 0.6%, or US$42 per employee per year

Local unemployment or workforce contributions, where required under American Samoa programs, can also add some cost. Confirm current rates with the American Samoa Department of Human Resources

That brings the total employer FICA cost per month to US$229.50, making total employment cost US$3,229.50 before territory unemployment contributions and income tax remittances.

Core reporting forms

These are the forms you’ll be using most often:

• Form 941: the quarterly federal employment tax return used to report income tax withholding and FICA contributions, due by the last day of the month following each quarter end
• Form W-2AS: the annual wage statement for wages subject to American Samoa income tax withholding, issued to employees and filed with the territory tax office
• Form 940: annual federal unemployment tax return, filed by January 31

That separation is critical. Federal employment taxes go to the IRS. American Samoa income tax withholding goes to the American Samoa Government Department of Treasury in Pago Pago.

Work location rules that determine your payroll tax setup

Payroll follows where the work is performed.

If your employee performs services in American Samoa, those wages are generally treated as American Samoa-sourced for income tax withholding. Occasional travel to the mainland does not automatically change that.

Common scenarios to think through:

• Full-time in Pago Pago.  You withhold Samoa income tax and issue Form W-2AS at year's end.
• Split-jurisdiction role. You document where services are performed and allocate wages accordingly.
• Mid-year relocation.  You may need to reflect on two jurisdictions in one calendar year.

Document primary work location and any changes. Keep effective dates. If withholding shifts mid year, you want a clear paper trail.

Territory income tax withholding basics

Samoa income tax withheld is the territory-level income tax you deduct from wages earned for services performed in American Samoa.

Before the first payroll, collect:

• Employee identification details such as legal name, address, and tax ID.
• Any required territory withholding forms.
• Clear confirmation of where services are performed.

Then build a repeatable process. Your payroll system should flag the employee as subject to Samoa income tax and route deposits to the correct authority.

Form W-2AS and when to use it

Form W-2AS is used for wages subject to American Samoa income tax withholding.

It is not interchangeable with Form W-2. The IRS specifically warns that you should not use Form W-2AS for wages subject to U.S. income tax withholding.

Boxes employers most often misreport include:

• Wages subject to Samoa income tax
• Samoa income tax withheld
• Social Security and Medicare wages

At year end, reconcile your payroll register to your W-2AS totals before issuing statements. This is where configuration mistakes show up.

Social Security and Medicare withholding

FICA applies in American Samoa.

You withhold the employee share and match it as the employer. Taxable wages typically include regular pay, overtime, bonuses, and many allowances.

Before you finalize your payroll setup, review how you treat:

• Housing allowances
• Per diems
• Taxable fringe benefits

If you misclassify a stipend, you can create back taxes and amended filings later. It is easier to get this right during setup.

Federal unemployment tax in a territory context

FUTA can apply to wages paid in U.S. possessions. The wage base and rate are set at the federal level and reported annually on Form 940.

Before you price a hire, confirm:

• Whether FUTA applies to your arrangement
• The current FUTA wage base and rate
• Any coordination with local unemployment programs

Do not assume state rules apply automatically.

Local unemployment and workforce contributions

In addition to federal taxes, confirm local unemployment or workforce development requirements with the appropriate American Samoa agency.

During employer registration, you may be asked for:

• Business registration details
• Federal employer identification number
• Estimated payroll and headcount

Validate wage bases, rates, and deposit frequency directly with the local authority. Generic payroll tools do not always preload these correctly.

If you are considering long-term expansion, reviewing your options for global payroll services can help you compare running payroll internally versus using external support.

Tips and resources for a successful setup

If this is your first hire, start with primary sources.

Review current IRS instructions for Forms 941 and W-2AS. Confirm territory procedures directly with the American Samoa tax office. Keep copies of registration confirmations and deposit receipts.

Create a one-page internal reference sheet that clearly separates federal employment taxes from Samoa income tax withholding. That single document becomes your guardrail as your team grows.

Run a parallel payroll test before going live. Manually calculate one pay period and compare it to your system output. If the numbers do not match, pause and fix it.

You don’t need to become a territory tax expert, you just need a system that works right every time.

Utilizing support from an Employer of Record (EOR)

An employer of record is a third party that legally employs your worker on your behalf in a specific country or territory.

You direct the employee’s day-to-day work. The EOR handles the legal employment relationship, payroll processing, tax withholding, benefits administration, and required reporting.

When you use global EOR services, the provider registers with local authorities, manages Samoa income tax withholding, files the correct federal employment tax forms, and issues wage statements such as W-2AS.

If you are exploring hiring in American Samoa for the first time, this approach can help you move faster without setting up your own local entity. And if you want to see how it works in practice, reviewing an EOR in American Samoa gives you a clear picture of responsibilities and timelines.

An EOR does not replace your leadership. You still set pay, manage performance, and shape the employee experience. The EOR takes on the administrative burden and helps keep you aligned with territory and federal rules.

Bringing it all together

If you’ve made it this far, you’ve got your sights set on American Samoa. There’s a lot that needs to be taken care of before you can start hiring, though: researching taxes, hiring experts in local labor law, finding a payroll processor, and more. It takes a lot of time and a lot of money. Wouldn’t it be great if there were an easier way?

With Pebl, there is.

Our EOR platform allows you to hire, pay, and manage employees in American Samoa without setting up your own local entity. That means your team starts in days, not months. We handle it all: onboarding, benefits, salary benchmarking, payroll, and compliance with all local regulations. Every statutory withholding, remittance, and report the law requires, we make sure it happens. All you have to do is stay focused on leading your team.

When you’re ready to expand the easy way, let us know.

This information does not, and is not intended to, constitute legal or tax advice and is for general informational purposes only. The intent of this document is solely to provide general and preliminary information for private use. Do not rely on it as an alternative to legal, financial, taxation, or accountancy advice from an appropriately qualified professional. The content in this guide is provided “as is,” and no representations are made that the content is error-free. 

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