Payroll Services Industry Profile

Companies in this industry generate paychecks, payroll reports, and tax filings for clients. Major US-based companies include ADP, Dayforce, Insperity, and Paychex, and others include Neeyamo (India), Nethris (Canada), and Populis Servicos (Brazil).

The global payroll services market is expected to grow by about $6 billion at a compound annual growth rate (CAGR) of about 4.8% from 2023 to 2028, according to Technavio. More than half of the growth in the industry will come from North America.

The US payroll services industry includes about 5,700 establishments (single-location companies and units of multi-location companies) that generate annual revenue of about $22 billion.

Professional employer organizations (PEOs), which may also provide payroll services, are covered further in a separate industry profile.

COMPETITIVE LANDSCAPE

Demand for payroll services is driven by employment. The profitability of individual companies depends on the efficient use of information technology and effective marketing. Large companies can better compete for business from customers who operate from multiple locations. Small companies can compete by serving local or regional markets. The US industry is concentrated: the 50 largest companies account for about 70% of industry revenue.

Companies in this industry may compete with other providers of outsourced human resources (HR) management services, including professional employer organizations (PEOs), business process outsourcing (BPO) firms, or financial institutions. Companies may also compete with organizations that have in-house payroll services, typically conducted through their accounting or HR ...