We describe a low complexity method for time domain compensation of phase noise in OFDM systems. We extend existing methods in several respects. First we suggest using the Karhunen-Loéve representation of the phase noise process to estimate the phase noise. We then derive an improved datadirected choice of basis elements for LS phase noise estimation and present its total least square counterpart problem. The proposed method helps overcome one of the major weaknesses of OFDM systems. We also generalize the time domain phase noise compensation to the multiuser MIMO context. Finally we present simulation results using both simulated and measured phased noise. We quantify the tracking performance in the presence of residual carrier offset.