Payroll Services

Payroll Services

Brief Excerpt from Industry Overview Chapter:

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).

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.

PRODUCTS, OPERATIONS & TECHNOLOGY

Major services include full-service payroll services (about 95% of industry revenue), other payroll services sold separately account for the remainder.

Payroll services companies collect employee information, such as wages, hours worked, deductions, and other compensation-related data, then process it to generate employee paychecks and reports on behalf of employers. These services generally include deposits and filings related to federal, state, and local taxes. The payroll services industry doesn't include offices of CPAs, which may provide payroll services in addition to their other offerings.