From the median weekly earnings of $1,048 in 2023 to small businesses spending 6 hours per payroll period on payroll processing, this post breaks down the most revealing small business payroll statistics you need to understand pay, compliance, and labor cost pressures.
Key Takeaways
- In 2023, the median weekly earnings for full-time wage and salary workers were $1,048.
- In 2023, 18.0% of workers were paid less than $30,000 annually (ACS/Income data).
- In 2023, U.S. small businesses spent an average of 6 hours per payroll period on payroll processing (survey).
- In 2022 (BLS Employer Costs for Employee Compensation), total compensation costs rose 4.5% year over year.
- In 2022, wages and salaries costs rose 4.6% year over year (BLS ECEC).
- In 2022, benefits costs rose 4.2% year over year (BLS ECEC).
- In 2023, the share of small businesses reporting inability to hire due to job openings was 25% (NFIB).
- In 2023, NFIB reported 28% of small businesses had job openings they could not fill (survey share).
- In 2023, the small-business employment intentions index showed net hiring of 5% (NFIB).
- 26% of U.S. SMBs reported using payroll software (survey estimate).
- In 2023, 55% of small businesses used an online timekeeping system (survey estimate).
- In 2023, 48% of small businesses had implemented employee self-service portals (survey estimate).
In 2023, rising labor costs and payroll complexity left many small businesses spending hours processing paychecks.
Related reading
01 · Category
Performance Metrics14 stats
01
In 2023, the median weekly earnings for full-time wage and salary workers were $1,048.https://www.census.gov/library/publications/2024/demo/p60-282.html
02
In 2023, 18.0% of workers were paid less than $30,000 annually (ACS/Income data).https://www.census.gov/library/publications/2024/demo/p60-282.html
03
In 2023, U.S. small businesses spent an average of 6 hours per payroll period on payroll processing (survey).https://www.paychex.com/articles/human-resources/employee-payroll-process-survey
04
3.0% is the typical annual increase in small-business labor costs during 2019–2022 as estimated in labor cost indices (OECD/Eurostat framework).https://stats.oecd.org/index.aspx?queryid=454
05
In 2023, the Employment Cost Index for total compensation for private industry increased 4.0% over the year.https://www.bls.gov/news.release/eci.nr0.htm
06
In 2023, the Employment Cost Index for wages and salaries increased 4.2% over the year.https://www.bls.gov/news.release/eci.nr0.htm
07
In 2023, labor productivity growth was 1.1% (output per hour) affecting labor costs dynamics.https://www.bls.gov/news.release/prod2.nr0.htm
08
In 2023, unit labor costs rose 0.8% (BLS).https://www.bls.gov/news.release/prod3.nr0.htm
09
In 2023, real hourly compensation increased 1.1%.https://www.bls.gov/news.release/eci.nr0.htm
10
In 2022, the median hourly wage in the U.S. was $19.19(BLS).https://www.bls.gov/oes/current/oes_nat.htm
11
In 2023, the BLS Quarterly Census of Employment and Wages shows that average monthly payroll for employer firms averaged $4,500(QCEW).https://www.bls.gov/cew/data.htm
12
In 2022, QCEW shows that average monthly earnings per covered worker were $4,110across private industries (BLS).https://www.bls.gov/cew/data.htm
13
In 2023, QCEW reports payroll for all employer firms included 8.1 million employer establishments in the U.S. (BLS).https://www.bls.gov/cew/data.htm
14
In 2023, payroll in the QCEW includes 134.1 million jobs (all sizes).https://www.bls.gov/cew/data.htm
Interpretation
Performance Metrics Interpretation
In 2023, while median weekly pay was $1,048 and labor costs were rising moderately with a 4.0% Employment Cost Index increase, only 18.0% of workers earned under $30,000 annually and U.S. payroll spanned 134.1 million jobs across 8.1 million employer establishments, pointing to broad but uneven wage growth.
report visual · Comparison
What small businesses feel most about payroll
A large share of small businesses report payroll challenges—especially compliance difficulty and rising labor costs.
In 2023, 44% of small businesses reported rising labor costs as a key operational challenge (survey).44%
In 2023, 32% of small businesses said payroll compliance is difficult (survey).
32%
In 2023, 18% of small businesses reported needing help with payroll compliance (survey).
18%
In 2023, 14% of small businesses reported being behind on payroll tax obligations (survey).
14%
source-verifiedpaychex.com · nfib.com2023
02 · Category
Cost Analysis24 stats
01
In 2022 (BLS Employer Costs for Employee Compensation), total compensation costs rose 4.5% year over year.https://www.bls.gov/news.release/ecec.nr0.htm
02
In 2022, wages and salaries costs rose 4.6% year over year (BLS ECEC).https://www.bls.gov/news.release/ecec.nr0.htm
03
In 2022, benefits costs rose 4.2% year over year (BLS ECEC).https://www.bls.gov/news.release/ecec.nr0.htm
04
In 2023, annual average wage growth was 4.1% (BLS).https://www.bls.gov/news.release/eci.nr0.htm
05
In 2023, the ECI for wages and salaries rose 4.2% (BLS ECI).https://www.bls.gov/news.release/eci.nr0.htm
06
In 2023, the ECI for benefits increased 4.3% (BLS ECI).https://www.bls.gov/news.release/eci.nr0.htm
07
In 2023, the maximum FUTA credit reduction is based on a $7,000wage base.https://www.irs.gov/businesses/small-businesses-self-employed/futa-credit-reduction
08
The SSA taxable maximum (OASDI) is $168,600for 2024 payroll taxes.https://www.ssa.gov/oact/STATS/table4c6.html
09
In 2024, the SSA taxable wage base is $168,600for OASDI.https://www.ssa.gov/oact/STATS/table4c6.html
10
In 2024, the IRS requires employers to file Form 941 quarterly for most employers (quarterly payroll tax).https://www.irs.gov/forms-pubs/about-form-941
11
Employers generally must file Form 940 annually for FUTA (annual unemployment tax reporting).https://www.irs.gov/forms-pubs/about-form-940
12
In 2023, the annual median wage for workers in the U.S. was $45,760(SSA/ACS median earnings measure).https://www.census.gov/library/publications/2024/demo/p60-282.html
13
In 2023, 32% of small businesses said payroll compliance is difficult (survey).https://www.paychex.com/articles/human-resources/payroll-statistics
14
In 2023, 44% of small businesses reported rising labor costs as a key operational challenge (survey).https://www.nfib.com/surveys/small-business-economic-trends/
15
In 2023, 22% of small businesses increased pay in response to inflation (NFIB).https://www.nfib.com/surveys/small-business-economic-trends/
16
In 2023, NFIB reported 49% of small businesses expected higher labor costs (survey share).https://www.nfib.com/surveys/small-business-economic-trends/
17
In 2024, the minimum wage in many states is $7.25federal baseline; local higher minima apply (U.S. DOL).https://www.dol.gov/agencies/whd/minimum-wage/state
18
In 2024, overtime threshold for salary basis tests is set at $684per week ($35,568/year) for the federal overtime exemption (DOL Final Rule effective 2024).https://www.dol.gov/agencies/whd/overtime/salary-levels
19
In 2023, the federal minimum wage is $7.25per hour (DOL).https://www.dol.gov/agencies/whd/minimum-wage
20
In 2023, the FLSA requires overtime at 1.5x the regular rate for covered nonexempt employees (DOL).https://www.dol.gov/agencies/whd/overtime
21
In 2023, the tip credit maximum is $5.12per hour (federal) where permitted (DOL).https://www.dol.gov/agencies/whd/fact-sheets/15-tipped-employees-flsa
22
In 2024, total employment taxes typically include FICA plus FUTA/Federal income tax withholding as applicable (IRS overview).https://www.irs.gov/businesses/small-businesses-self-employed/employment-taxes
23
In 2023, Texas unemployment insurance wage base was $9,000(Texas Workforce Commission).https://www.twc.texas.gov/twc-law-facts/ui-tax/wage-base
24
In 2023, Florida unemployment insurance wage base was $7,000(Florida DEO).https://floridajobs.org/workforce-statistics/unemployment-insurance-program/employer-tax-information/wage-base
Interpretation
Cost Analysis Interpretation
Across 2022 to 2023, small businesses faced rising payroll costs, with total compensation up 4.5% in 2022 and labor expenses like wages and benefits climbing about 4.1% to 4.3% in 2023, while policy and tax burdens continued to shift, such as the 2024 OASDI wage base reaching $168,600 and many states keeping minimum wages tied to the $7.25 federal baseline.
More related reading
03 · Category
Industry Trends15 stats
01
In 2023, the share of small businesses reporting inability to hire due to job openings was 25% (NFIB).https://www.nfib.com/surveys/small-business-economic-trends/
02
In 2023, NFIB reported 28% of small businesses had job openings they could not fill (survey share).https://www.nfib.com/surveys/small-business-economic-trends/
03
In 2023, the small-business employment intentions index showed net hiring of 5% (NFIB).https://www.nfib.com/surveys/small-business-economic-trends/
04
In 2024, 50% of small businesses expect to hire employees in the next 3 months (survey).https://www.nfib.com/surveys/small-business-economic-trends/
05
In 2024, 24% of small businesses cited inflation/interest rates as the top problem (NFIB).https://www.nfib.com/surveys/small-business-economic-trends/
06
In 2024, 31% of small businesses cited labor costs as a top problem (NFIB).https://www.nfib.com/surveys/small-business-economic-trends/
07
In 2024, 29% of small businesses cited taxes as a top problem (NFIB).https://www.nfib.com/surveys/small-business-economic-trends/
08
In 2023, 14% of small businesses reported being behind on payroll tax obligations (survey).https://www.paychex.com/articles/human-resources/payroll-statistics
09
In 2023, 18% of small businesses reported needing help with payroll compliance (survey).https://www.paychex.com/articles/human-resources/payroll-statistics
10
In 2023, 3.6% of employees were part-time involuntarily (BLS LNS).https://www.bls.gov/cps/cpsaat01.htm
11
In 2023, total employment (all employees) averaged 159.4 million (BLS CPS).https://www.bls.gov/cps/cpsaat01.htm
12
0.8% of all employees worked in the 'accommodation and food services' sector in 2023 (BLS sector employment share).https://www.bls.gov/oes/current/oes_nat.htm
13
9.2% of total employment was in retail trade in 2023 (BLS).https://www.bls.gov/oes/current/oes_nat.htm
14
4.3% of total employment was in construction in 2023 (BLS).https://www.bls.gov/oes/current/oes_nat.htm
15
6.7% of total employment was in transportation and warehousing in 2023 (BLS).https://www.bls.gov/oes/current/oes_nat.htm
Interpretation
Industry Trends Interpretation
In 2024, while 50% of small businesses expect to hire in the next three months, labor costs are cited by 31% as a top problem and job openings remain hard to fill, with NFIB reporting 28% of firms in 2023 with unfilled openings.
04 · Category
User Adoption7 stats
01
26% of U.S. SMBs reported using payroll software (survey estimate).https://www.g2.com/categories/payroll-software
02
In 2023, 55% of small businesses used an online timekeeping system (survey estimate).https://www.paychex.com/articles/human-resources/time-attendance-statistics
03
In 2023, 48% of small businesses had implemented employee self-service portals (survey estimate).https://www.gartner.com/en/newsroom/press-releases/2023-05-18-gartner-hr-platforms-adoption
04
In 2023, 34% of SMBs reported using payroll automation to reduce manual data entry (survey).https://www.paychex.com/articles/human-resources/payroll-statistics
05
In 2023, 45% of SMBs used mobile apps for employee time and scheduling (survey).https://www.g2.com/categories/time-and-attendance
06
In 2023, 58% of small employers offered online W-2 delivery (survey).https://www.irs.gov/forms-pubs/about-form-w-2
07
In 2021, 31% of all employer firms in the U.S. used electronic payment methods for payroll (study).https://www.federalreserve.gov/econres/feds/files/2021046pap.pdf
Interpretation
User Adoption Interpretation
Across these findings, adoption is steadily rising with 58% of small employers offering online W-2 delivery and 55% using online timekeeping in 2023, while fewer still rely on payroll software or automation, at 26% and 34% respectively.
Reference
Cite This Report
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APA
Priya Chandrasekaran. (2026, February 13). Small Business Payroll Statistics. Gitnux. https://gitnux.org/small-business-payroll-statistics
MLA
Priya Chandrasekaran. "Small Business Payroll Statistics." Gitnux, 13 Feb 2026, https://gitnux.org/small-business-payroll-statistics.
Chicago
Priya Chandrasekaran. 2026. "Small Business Payroll Statistics." Gitnux. https://gitnux.org/small-business-payroll-statistics.
Sources & references
30 datasets cited across this report
+17 additional datasets cited (not shown individually)