The latest Paychex Small Business Employment Watch shows that job and wage growth among U.S. small businesses remained relatively steady at the start of 2026. The Small Business Jobs Index, which measures employment trends among businesses with fewer than 50 employees based on Paychex payroll data, registered 99.30 in January, reflecting modest but consistent job growth.
Hourly earnings growth for small business workers has remained relatively stable, increasing 2.68 percent year over year. Wage growth has stayed below three percent since late 2024, indicating moderate but steady compensation increases across the small business sector.
Regional data shows that the Midwest continues to lead the nation in small business job growth, maintaining the top position among regions. At the industry level, education and health services reported the strongest employment growth, continuing a multiyear trend of expansion within the sector.
The Paychex Small Business Employment Watch draws on payroll data from a subset of Paychex clients with fewer than 50 employees and provides insight into employment and wage trends across regions, states, metro areas, and industries.