The payroll can be a significant part of an organization’s operations, on both a financial and administrative level. Confusing tax laws and complex employment laws can dramatically affect various areas of a business.
The following payroll statistics will help you work out how certain employee changes might affect your business. In addition, they’ll help you prepare and learn about various innovative solutions that have the potential to lower your payroll expenses.
Key Payroll Statistics and Facts
As many as 30% of businesses have misclassified their employees.
$6 billion in employer penalties were assessed by the IRS in 2020.
According to four out of ten small business owners, the most time-consuming and worst part of owning their business are taxes and bookkeeping.
When a company outsources its payroll, there is the potential to save 18% compared to those companies that do it themselves.
Payroll Statistics by Industry
The number of gig economy workers is 57.3 million.
The average number of employees per firm in the construction sector is 7.7
The average number of employees per firm in the health care and social assistance industry is 13.8.
In accommodation and food services, the average number of employees per firm is 15.9.
Employee Payroll Statistics
25% of all employees have experienced a paycheck error.
65% of workers in the US live from paycheck to paycheck.
Direct deposit is the payment method used for 93% of workers.
Paychecks are delivered on time for 93% of employees.
Effects of Payroll on Employee Statistics
82 million employees in the US have been affected by payroll problems.
Once an employee has experienced two paycheck errors, 49% of them will look for a new job.
28.83% of US workers would find it very difficult to meet their current financial obligations should their paycheck be delayed for 7 days.
There are twice as many payroll mistakes in homegrown payroll solutions compared to payroll solutions from third parties.
Small Business Payroll Statistics
Pen and paper are used for tracking finances by one-quarter of small businesses.
45% of small businesses do not have a bookkeeper or accountant of their own.
Cash flow is reported as a problem for 60% of small businesses.
Income taxes are an extra burden for 77% of small businesses.
70% of small business owners think that payroll taxes are a significant or moderate burden.
FAQs
How many payroll weeks in a year?
There are 52 work weeks in one year and pay periods typically add up as follows:
Weekly payouts – 52 payroll weeks Biweekly payouts – 26 payroll periods Semi-monthly – 24 payroll periods Monthly – 12 payroll periods
What percentage is payroll tax?
In the US, payroll tax rates are as follows:
Social security: 6.2% for the employer Social security: 62.% for the employee Medicare: 2.9%, which is also split evenly between both employer and employee
What percentage of expenses should payroll be?
Generally, your business payroll expenses should be between 15 to 30% of gross revenue. This is considered the safe zone for most types of businesses.
Conclusion
The modern workforce is constantly changing but paying that workforce, whether they are company employees, independent contractors, or gig workers, will always be a vital part of running a business. If you’re not aware of payroll trends, you could find yourself and your company being left behind and exposed to various legal liabilities.
When you internally formalize your payroll processes or partner with a reliable payroll service, it makes life easier and more cost-effective.
Georgi Todorov is the founder of ThriveMyWay, a website dedicated to teaching successful digital marketing strategies. Georgi is regularly called upon by companies seeking to develop and enhance their SEO and link-building strategies in order to achieve hockey stick growth. When Georgi isn’t working, you can find him getting close to nature, learning online or traveling.
