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49 Payroll Statistics Highlighting the Latest Trends

May 13, 2024

payroll statistics

Payroll is a business enabler. 

It enables companies to compensate their employees who keep the business running accurately and on time. However, it’s not always a walk in the park since it poses administrative and financial strain to reconcile accounts and calculate taxes while processing payments. 

Payroll, bookkeeping, and tax preparation are some services companies use regularly. Proactively planning for these helps human resource (HR) teams budget and strategize effectively. Small, medium-sized, and large businesses use payroll software to plan and ensure timely payments. On the other hand, startups that don’t have in-house HR usually outsource payroll services to HR freelancers or agencies. 

Let’s go through some key statistics to understand the latest trends in the market. 

Top payroll statistics in 2024

These statistics give an overview of the need for automation in payroll services to avoid errors and mistakes. They talk about outsourcing payroll services, paper-based payroll, and the consequences of errors in employee payment processing. 

  • 53% of businesses outsource payroll services to simplify their processes. 
  • 49% of US workers consider a new job after two payroll errors. Employees expect to be paid accurately and on time. Any mistakes hurt morale and drive people to quit.
  • Businesses spend an average of 120 hours per year on payroll. 
  • Over 85% of certified professionals are confident in managing payroll infrastructure.
  • Companies that use payroll automation are 33% more effective. Automation streamlines payroll tasks and reduces errors, helping businesses save time and money. 
  • 33% of companies make payroll errors that cost them billions a year.
  • Manual data entry causes 40% of payroll errors. 
  • 14% of small businesses still perform payroll services manually.


of small businesses experience fluctuating payroll depending on how many people they employ. This can make it tricky to manage their cash flow.

Source: JP Morgan

  • 34% of businesses still use paper for payroll. Paper-based systems are outdated and can be inefficient and insecure.
  • Businesses using payroll software see 31% fewer errors. The software helps ensure accuracy and reduce mistakes.
  • Gig workers worry about getting paid on time and in full. 20% report being paid late or not getting the agreed-upon amount.
  • One in three companies get penalized for payroll mistakes.
  • Businesses spend an average of $2,000 to $8,000 annually on payroll services. Although these services can be costly, they can save time and money by reducing errors.
  • 93% of employees in small businesses get their paychecks on time. However, only 60% of employees believe their paycheck deductions and net pay are accurate, and 27% are unsure.
  • Businesses with unpredictable cash flow, such as those with ups and downs in payroll needs, are two times more likely to have to shut down permanently.
  • Over 61% of small businesses face dynamic payroll cash outflows due to shifts in employment.

Payroll outsourcing statistics

Not every business has the resources or need to hire a full-time HR. 

Startups in their initial stages generally process their payroll with the help of agencies and other part-time HR contractors. It works for them since they have a limited number of team members. 

However, when they expand, they onboard a full-time, in-house HR and start automating different processes through software.

  • 61% of companies outsource payroll services. This means they hire other companies to handle their employee paychecks and taxes. 
  • 50% of small businesses outsource payroll services to individuals or other firms. 


of companies don’t outsource their payroll technology. Outsourcing payroll is either too expensive, or they don't want someone else handling their financial information.

Source: Bloomberg Tax

  • 80% of companies install insourced payroll software to manage things themselves.
  • 20% of companies use internal software and outside services to manage payroll.

Automation in payroll technology statistics

Payroll errors are, unfortunately, common. Automating payroll services reduces repetitive, time-consuming tasks, helping HR teams focus on more critical issues. 

Let’s understand if automation is trending in the payroll services market or if there are still a few gaps to fill.

  • Over 34% of businesses still use manual spreadsheets for payroll.


of companies used cloud-based payroll systems in 2021, a rise from 34.8% in 2019.

Source: Alight

  • By automating the process, companies see a reduction of 80% in payroll processing costs.
  • 29% of businesses still use payroll systems that are a decade old or older.
  • 83% of employers offer employees online access to self-service portals with their pay and benefits information.
  • Companies adapt to remote work by embracing cloud technology. Agile cloud solutions have skyrocketed from 34.8% in 2019 to 62% in 2023. This helps them manage remote teams and streamline payroll for these workers.
  • 47% of all automation in HR and payroll benefits focuses on direct compensation, making things smoother for employees and employers.

People's sentiments on their pay

Employee retention is becoming a challenge for companies. People’s expectations of their pay are changing accordingly. Take a look at the stats below to get a background of people’s sentiments and expectations when planning and strategizing the payroll service.

  • Salary attracts over 62.2% of candidates.
  • 48% of companies in the US regularly raise salaries to keep up.
  • Over 57% are offering salaries that meet what candidates are asking for.
  • 90% of companies are raising pay at least twice a year.
  • The US saw an average rise in sentiment of 4.1%, hitting a 20-year high in 2022. 


of workers in the US had little to no savings and spent most of their paycheck each month in 2023.

Source: Forbes

  • 96% of workers use direct deposit to receive their paychecks.
  • Over 54% of Americans have dealt with some kind of pay issue.
  • 84% of workers expect their pay to increase along with their experience at a company.
  • Over 65% of Americans prioritize higher wages over better health benefits. 
  • A one-week delay in pay would cause financial hardship for over 72% of Americans. 

Payroll error statistics

Not getting paid properly frustrates employees and might even disconnect them from their work. However, these errors are common when processing payroll manually or through a paper-based system.  

You need to automate these processes while complying with laws and employment regulations. Error-free payroll keeps your employees happy and your business running. Look out for these errors while processing payroll.

  • 30% of businesses might accidentally categorize their employees as independent contractors, leading to tax and legal issues.
  • Slow companies can take seven days to resolve a payroll mistake.
  • Automated bookkeeping and payroll systems can slash error rates by 67%.


of European employees were paid late by their employer in 2023.

Source: Keka

  • Almost half of the late-paid employees also received an incorrect amount.
  • In 80% of cases, employees themselves discovered the errors in their paychecks.
  • 44% of workers said they'd consider quitting if paid incorrectly. 

Make payroll services error-free

Pay employees on time while using automation to speed up payroll tasks. This will help you retain more people and motivate them to work. They won’t worry about when their next paycheck will be credited to their accounts, helping them concentrate more on their job. 

Making payroll error-free is the basic step to attracting and retaining top talent while easing the strain on HR departments. With automated payroll, HR teams can better ensure compliance with regulations and focus on other critical activities that keep a business running. 

If you want to explore how payroll software can help you prevent errors, check out the free payroll tools and see it for yourself.

Payroll Software
It's almost payday!

Find the right payroll software to manage and streamline payroll processes and ensure employees are paid timely and accurately.

Payroll Software
It's almost payday!

Find the right payroll software to manage and streamline payroll processes and ensure employees are paid timely and accurately.

49 Payroll Statistics Highlighting the Latest Trends Explore these payroll services statistics to learn how modern organizations handle payroll. See the latest trends in the industry.
Sagar Joshi Sagar Joshi is a former content marketing specialist at G2 in India. He is an engineer with a keen interest in data analytics and cybersecurity. He writes about topics related to them. You can find him reading books, learning a new language, or playing pool in his free time.

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