2024 Payroll Statistics: A Look at the Most Recent Trends

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Our payroll statistics discuss recent payroll trends, payroll implementation challenges, and tech innovations in the US.

We explore the most recent developments on the US job market, the changing legal landscape of employee tax regulations, and several unexpected findings about payroll mistakes.

Keep reading to learn how the latest payroll statistics could apply to you as an employee or business owner.

Key Payroll Statistics and Facts to Know In 2024

A Look At Employment And Salary Statistics in The US

Before delving deeper into payroll statistics in the US, let’s look at the current job market trends for a broader context. The numbers of new job openings and hires, in particular, could tell us more about payroll additions across business sectors and US regions.

Recent Trends in Job Openings and Hires

According to a recent Statista survey conducted throughout April 2022–2024, monthly job openings have been going down in the US. There was a peak of 11.76 million openings in Q2 2022, with the numbers fluctuating widely from June to December.

It’s also worth noting the data was also seasonally adjusted. Since 2022, the numbers have been on a linear downward trend, reaching the lowest value in Q2 2024, with 8.06 million openings recorded.

A 2024 BLS report shows nonfarm payroll employment figures mirror these peaks in job openings. However, the data in this report is based on monthly surveys of just 140,000 businesses.

Survey findings show an average monthly addition of 247.8k payroll employees across approximately 440,000 US worksites throughout Q1–Q2 2024.

The same 2024 BLS data shows the unemployment rate and the number of unemployed people didn’t change much since 2023. Last year, the unemployment rate was 3.7%; as of May 2024, the unemployment rate reached 4%.

The number of unemployed people went from 6.1 to 6.6 million over the same period – an 8.3% increase. The BLS survey also identified 4.4 million part-time employees.

Most of the 2024 job openings documented to date were in Southern US, which had over double the numbers of other regions. In fact, Florida and Texas had the highest net change in nonfarm employment rates recently.

This April, Florida and Texas gained approximately 45,300  and 42,600 new employees, respectively. At the opposite end, the number of nonfarm employees in New Jersey went down by nearly 11,000.

The majority of the new job hires in April 2024 came from four primary industries, though there’s no further stratification by region or state. These figures include both new hires and rehired employees.

The trade, transportation, and utilities sector had the most new payroll additions, with 1.124 million new hires. Professional and business services also had over 1 million new monthly job hires.

The leisure and hospitality sector hired 964k employees, but the seasonal nature of some hospitality jobs could mean many of them were rehired. Finally, the education and health services sector were the fourth largest creator of jobs, with over 900k monthly hires.

Subsequent data based on CES figures paints a slightly different picture, with private education and health services, government, and leisure and hospitality hiring the most employees in May. However, their classification of industries by sector was different, and the data was seasonally adjusted.

Average Salary and Payroll Revenue Trends

While the monthly job openings have been down, the average US monthly earnings (per hour) have increased slightly, from $32.06 in May 2022, to a peak of $34.91 in May 2024. This is for all full-time and part-time employees (aged 16+) on private, nonfarm payrolls.

As of May 2024, the utilities industry seems to have the highest average pay of $51.08/hour – 46% higher than the average pay for the private sector overall.

Utilities were followed by information ($49.41/hour), financial activities ($45.47/hour) and professional and business services ($42.01/hour).

Workers in the private education and health services earned $34.09/hour on average, slightly less than the overall private sector average. Retail trade and leisure and hospitality had the lowest average wages, at under $25/hour.

Revenue collected from payroll taxes has also been increasing linearly, going from $652.9 billion in 2000, to $1.61 trillion in 2023. Based on this trend, payroll tax revenues are projected to reach $1.66 trillion by the end of 2024.

Payroll Impacts on Small Business

The average wage has been slowly increasing, but small businesses are struggling to keep up.

In 2024, the SSA plans a 5.2% increase in the wage base, and an additional 5% increase in the wage cap for taxable income – two decisions which will influence small business payroll planning and decision-making.

Employee salaries greatly impact business budgets and, as per the most recent figures published by the NAWBO, 74% of small business owners said their costs have increased over the past year.

Additionally, 27.6% small businesses fail by their second year, with 37% citing financing issues as a threat to their operations.

We can already see the consequences. According to Reuters, private employers reached a four-month low in May 2024, with many small businesses reducing their staff.

While large and mid-sized companies hired the same number or slightly more employees than in April, small firms cut a collective average of 10,000 jobs across different sectors.

Small businesses make up the majority of US enterprises and hire over 45% of private sector employees, so these downward trends have a profound impact on overall payroll statistics.

In fact, small businesses pay over a third of the private sector payroll, although the average small firm has 1–19 employees (not counting the majority of small businesses without any employees).

Payroll Statistics Regarding US Employees

According to B2B Reviews, over 95% of US employees receive their pay via direct deposit, and the most common payroll timeframe is once every two weeks. Over 40% of US businesses pay their employees biweekly, and only 10% provide monthly payrolls.

Interestingly, according to a CES survey covered by B2B Reviews, small businesses are more likely to pay their employees weekly. Slightly over a third of businesses with 10–19 employees have a weekly payroll, compared to 26.3% of businesses with 1,000+ workers.

The second most common payroll method was the paper paycheck, used by only 2.85% of businesses. Payroll cards, online payment platforms, and other methods accounted for less than 1% each.

The efficiency and simplicity of direct deposit payments likely contribute to its widespread use. As of a 2022 survey by the American Payroll Association, over 90% of the 27,000+ respondents said they always receive their paycheck on time.

According to the same survey, nearly 60% of people claimed to be very certain their payroll calculations are correct each payday.

A Majority of US Workers Enjoy Employee Benefits

Benefits can also impact business payroll, but they are crucial for employee retention rates. It seems the majority of employers aim to balance business spending with employee satisfaction, as most businesses provide some form of employee benefits.

Slightly over 4 in 5 US employees have paid time off, according to USA Today. This makes PTO the most common employee benefit, followed by sponsored health insurance, provided by nearly 80% of employers.

However, only 25% of part-time private-industry workers have health insurance provided by their employers, compared to 87% of full-time employees.

Unionized workers in private industries also receive better benefits on average; 96% had healthcare coverage, with a 79% premium for family plans (compared to 69% coverage with 65% premiums for non-union workers).

Still, USA Today also reported that over a third (39%) of employers offered medical plans with no deductibles or low deductibles.

On the flip side, 77% of employers provide 401(k) or other retirement programs as an employee benefit. However, these US payroll benefits might change soon, following new laws and regulations.

The SECURE 2.0 Act of 2022 will be effective after December 31st, 2024, and some of its provisions mention that:

Payroll Mistakes Statistics

Older figures from a SurePayroll compliance survey showed that 32% of business owners admitted to having made at least one payroll mistake in 2020.

Underpaying employees was the most commonly cited error. The majority of surveyed owners also claimed it took them over 24 hours to fix a payroll mistake.

In addition, 42% of the small business owners in the survey claimed to use DIY payroll solutions and 45% claimed to be familiar with regulations that don’t actually exist.

Shockingly, according to B2B Reviews, misclassifying employees was also quite common. Up to 30% of employers classify their workers as independent contractors, according to figures provided by the Economic Policy Institute.

We don’t know if this is done to cut spending on taxes, or if it is accidental. Regardless, this type of mistake could lead to serious legal issues. Payroll service providers and software could play a big role in mitigating such risks.

This is all the more important for cutting unnecessary business spending. As the SurePayroll survey highlights, 31% of the respondents that were fined for compliance failure said they had to fire an employee to make up for the fine costs.

At a national level, businesses pay billions of dollars in fines annually. According to 2023 figures from the IRS, companies have amassed over 4 million cases of civil penalties for employment taxes, which amounted to over $8.5 billion.

Failure to pay was the most commonly-assessed penalty, and the collective fine was over $1.5 billion. Fines for employment tax delinquency also made up over $1.7 billion.

Payroll Services and Technology Adoption in The US

According to B2B Reviews, the U.S. has approximately 5,700 payroll service providers.

Throughout 2017–2022, payroll and bookkeeping services have been increasing steadily, recording an average growth of 1.7% per year. This suggests companies are slowly starting to outsource their payroll work, driving the demand for such services.

In fact, payroll providers are expected to grow 5.8% globally until 2027, with North America fueling much of this growth.

The HR payroll software market is also estimated to grow at a CAGR of 9.2% until 2030, while cloud-based payroll solutions are expected to reach a market value of $15.73 billion by 2033.

Statista estimates from 2022 show that payroll solutions like Gusto, Paychex, Paycom, and Paylocity made up over a quarter of the shares on the global administrative software market.

The adoption of digital payroll solutions is also increasing among small and medium-sized businesses looking to increase efficiency and reduce administrative costs. Considering recent and upcoming developments in the payroll solutions segment, we can expect this positive trend to continue.

It’s likely that more medium and even small businesses will switch to digital payroll solutions, thanks to the many benefits of payroll management systems, like:

Payroll Challenges and Risks Are Far From Over

These recent payroll statistics highlight significant trends and challenges shaping the US job market. Since 2023, the employment rate has stayed constant, although the number of new job openings in 2024 is down from the 2022 peak.

In addition to this, these 2024 payroll statistics and facts revealed changes in the average US wages and new employee tax regulations. These further add to the challenges faced by small businesses, which already cover over a third of the US payroll taxes.

Besides financing issues, small businesses face unique hurdles in compliance and cost management, with many business owners admitting to making potentially costly payroll mistakes. However, the growing popularity of payroll solutions could make tax compliance and payroll accuracy easy and accessible for more business owners.

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