The Paychex Small Business Employment Watch for January 2026 indicates that job and wage growth trends among U.
S. small businesses remained consistent, with the Small Business Jobs Index rising to 99.30 and hourly earnings growth holding at 2.68%.
According to the report, which reflects payroll data from a subset of Paychex clients with fewer than 50 employees, the Small Business Jobs Index increased by 0.04 percentage points to 99.30 in January. Hourly earnings growth for workers has remained essentially unchanged at 2.68% since July 2025. John Gibson, Paychex president and CEO, stated, “As we enter 2026, the pace of employment and wage growth for America’s small businesses remains on a similar path that we saw in 2025. Our Small Business Job Index, combined with other information, continues to point to an economy that is expanding at a solid pace without significant inflation pressure from wages. While we anticipate potential economic tailwinds from last year’s tax bill to come to fruition in 2026, our HR professionals consistently hear from our clients that they continue to navigate persistent challenges with the supply of qualified labor and rising healthcare costs.”
The national jobs index of 99.30 represents a 0.04 percentage point increase from December 2025 and a 0.03 percentage point increase from the previous quarter. Hourly earnings growth has been recorded below three percent since November 2024, including the 2.68% observed in January. Weekly earnings growth saw a slowdown to 2.53% in January. Furthermore, the one-month annualized weekly earnings growth, which stood at 1.62%, has been below two percent for the last three consecutive months. The last period where one-month annualized weekly earnings growth remained below two percent for three straight months was in December 2020.
Regionally, the Midwest maintained its position as the top region for small business job growth for the 20th consecutive month. In terms of sectors, Education and Health Services led for small business job growth for the 20th consecutive month, having reported growth for nearly five years.
Paychex, Inc. (Nasdaq: PAYX) is a digitally driven HR leader that provides comprehensive Human Capital Management (HCM) solutions for organizations. Serving approximately 800,000 customers in the U.
S. and Europe, Paychex processes payroll for 1 out of every 11 American private sector workers. The Paychex Small Business Employment Watch has served as a source for employment trends among U.
S. small businesses with fewer than 50 employees since 2014, offering interactive charts and historical data across its jobs index and wage data components.
