20+ Payroll Statistics You Need to Know in 2024

As a small business owner, handling payroll takes a significant part of operations. Payroll processes include complicated employment laws and confusing tax rules that can affect various areas of your business.

Payroll statistics and trends can help you uncover these effects and explore innovative solutions to minimize the hassle, making payroll processes more manageable.

Read on to discover our research on payroll and conclusions based on important statistics:

1. Employees pay attention to the accuracy and timeliness of their paychecks

For most employees, getting paid on time and accurately is crucial for covering bills and expenses. Payroll mistakes cause significant problems, and repeated errors might make employees think about leaving their jobs. 

So, ensuring that paychecks are correct and timely is essential for keeping employees satisfied and financially stable.

• Two payroll errors are enough to make 50% of employees start looking for a new job. (Kronos)
• A delay of just one week in receiving their paychecks would cause financial difficulties for 70% of employees. (American Payroll Association)
• A total of 56 million American workers have faced the challenge of paying a bill late due to a payroll error. (The Workforce Institute)
• Nearly half or 45% of American workers express that they would feel more engaged in their job if their employer provided assistance in better understanding taxes and deductions. (The Workforce Institute)

2. Mistakes in paychecks occur more frequently than one might assume

Payroll errors are more common than one might assume. Despite the desire of companies to minimize such mistakes, they occur more frequently than one might think. These errors lead to delayed payments or insufficient compensation. 

• Nearly 70% of companies encounter problems with their payroll data. (Ceridian/APA/GPMI)
• More than 82 million Americans have faced paycheck issues at some point in their careers. (The Workforce Institute)
• Approximately 6.3% of employees report that their paychecks are occasionally delayed. (American Payroll Association)

3. Payroll errors can lead to significant costs

The correction of payroll errors not only wastes time and effort but can also damage a business's credibility and reputation. Even minor mistakes can have notable financial implications, while frequent or substantial errors may lead to costly litigation or tax penalties.

• With a 1.2% error rate per pay period and an average of $900 weekly earnings for 100 employees, a company could face an annual loss of $56,647 due to payroll mistakes (Paycor/U.S. Bureau of Labor and Statistics). 
• Approximately 33% of employers make payroll errors, collectively resulting in significant annual costs (IRS). 
• 40% of small to mid-sized businesses often face IRS penalties for incorrect payroll filings, with an average penalty amounting to $845 (IRS). 
• A single data input error can waste 20% of an employee's time (CIPP). 

4. Processing payroll is one of the most time-consuming responsibilities for small business owners

Small business owners find processing payroll time-consuming due to various tasks like collecting data, managing taxes, meeting regulations, and keeping records. Handling employee inquiries, managing technology, and dealing with deductions add complexity. 

Accuracy in tax calculations and labor law compliance is crucial, making the process challenging. Issues with direct deposits, reconciliation, and financial reporting further contribute to the complexity. Many business owners are turning to automated payroll solutions, such as PayStubs.com to simplify these tasks and save time.

• A striking 85% of companies encounter challenges with their payroll technologies (Ceridian/APA/GPMI).
• 63% of small business owners tend to underestimate the time required for processing payroll (Bloomberg Tax).
• 35% of the average HR department's time is dedicated to handling payroll responsibilities (OnePoint).
• One-third of small businesses invest more than six hours per month in managing payroll (National Small Business Association’s Taxation Survey).
• Business owners dedicate almost five hours each pay period to handle the complexities of calculating, filing, and paying payroll taxes. This accumulates to a considerable commitment of 21 days throughout the year (Small Business Trends).

5. As some small businesses continue to rely on outdated payroll systems, an increasing number are embracing modern payroll technology solutions.

Payroll practices vary a lot, and technology plays a big role. Some businesses still use old-fashioned ways, and even those with early tech may need an upgrade. 

Luckily, there are payroll solutions for all business sizes, making many companies think about updating to modern tech or using cloud-based systems for better efficiency.

• 74% of businesses are currently using or in the process of adopting cloud-based payroll technology (Deloitte).
• 82% of workers have access to a self-service portal containing details about their pay and benefits (American Payroll Association).
• Four out of every ten companies rely on payroll spreadsheets for managing their payroll processes (GPMI).

The risks of errors, financial implications, and time consumption underscore the need for effective payroll solutions. 

To avoid the above-mentioned complexities, you can use payroll solutions, such as PayStubs.com- your go-to software for organized and error-free payroll management.

Ready to explore all the features? Sign up for our 14-day free trial now!