Small Business Payroll Index

The Small Business Payroll Index is an employment report showing the monthly percentage change in the number of Patriot Software's customers' workers who were added to or removed from payroll.

Percentage Change of Workers With a Payroll

Month in Progress

SMB Employer sample size 56,000 companies

Worker sample size 215,100 workers


  • SMB: Refers to small and medium-sized businesses.
  • SMB Employers: These are small business employers currently using Patriot Software to pay their workers. All of these employers and their workers are based in the United States.
  • Workers: This group includes both W-2 employees and 1099 contractors. While workers may operate in multiple locations across various states, their employment is recorded at the company's main office location.
  • Small Business Payroll Index: The monthly change (both percentage and raw number) in the workforce of these SMB employers, showing the rate at which they are hiring or laying off workers on their payroll.


    Patriot Software’s employment report should not be relied upon, and:
  • The data is not designed to predict, project, or clarify economic shifts in the United States.
  • The information comes from a relatively small dataset, which is not statistically significant for broad application or decision-making. While the Small Business Payroll Index gathers data from tens of thousands of businesses, it's important to note that this is a minute fraction compared to the overall tens of millions of American SMBs.
  • The employment report figures are derived from Patriot Software's varying monthly client numbers and are not evenly spread across all 50 states; for instance, there is a disproportionate concentration in California, Florida, Texas, and Ohio.
  • Fluctuations in Patriot Software's customer base can cause temporary increases or decreases in the reported month-to-month changes in the number of paid workers. For example, a new client with three employees is counted as an increase from zero in the preceding month. Conversely, if a client exits, it results in a reported reduction from the previous month's count to zero.

How it Works

The Dataset

  • The dataset includes the count of hourly and salaried employees, the number of contractors compensated, and the monthly variation in the total number of workers paid within a specific month.
  • The data underpinning Patriot Software's SMB Payroll Index can be provided upon request.

The Math

  • Every month, we determine the total number of unique workers who have been paid, either through a paycheck or another form of payment. This sum represents the monthly total of paid workers.
    • The total is the number of unique W-2 employees plus the number of unique contractors who received payment.
  • To gauge the month-to-month fluctuation, we take the current month's total paid workers, compare it with the last month's total, and calculate the percent difference.
    • The formula for this calculation is: [(Number of workers paid this month - Number of workers paid last month) / Number of workers paid last month] x 100.