US Payroll Statistics 2025/2026: 90+ Facts About American Paychecks

82 million US workers have experienced a paycheck error. Below are 90+ statistics on how Americans are paid — from average wages and pay frequency to payroll errors and the booming payroll software market.

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Average Salary & Wage Data

Understanding what Americans earn is essential context for any payroll conversation. Here are the latest figures on national wages, regional variations, and demographic breakdowns.

• The national average annual salary is $66,622, with a median of $61,984. (SoFi, Fidelity)
• Median weekly wages reached $1,194 in Q1 2025, equivalent to $62,088/year — up 4.8% year-over-year. (BLS)
• Average hourly earnings for private-sector workers: $36.30/hour as of June 2025, up $1.30 (3.7%) over 12 months. (BLS)
• Real average hourly earnings increased 1.2–1.5% from January 2025 to January 2026. (BLS)
• Median household income hit $83,730 in 2024, up 4% year-over-year — the first meaningful real-income gain in years. (DemandSage)
• Highest-paying states by average hourly wage: Massachusetts ($42.50/hr), Washington ($41.82/hr), California ($40.93/hr). (Visual Capitalist)
• Lowest-paying states: Mississippi ($28.25/hr), Louisiana ($29.17/hr). (Visual Capitalist)
• DC has the highest average annual income at $96,873; Mississippi has the lowest at $41,776. (World Population Review, SoFi)
• Men earned $1,333/week vs. women's $1,076/week in Q3 2025 — a $257 gap. (BLS)
• Asian workers lead in earnings with a median weekly income of $1,620. (BLS)

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Hourly vs. Salaried Workers

The majority of American workers are still paid by the hour, concentrated in service industries.

• 80.3 million workers (55.6% of all wage/salary workers) are paid hourly rates. (BLS)
• Roughly 50% of the 161.4 million employed Americans earn hourly wages. (BLS)
• 80% of hourly workers (~65 million) work in services jobs. (Progressive Policy Institute)

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Pay Frequency

How often Americans get paid varies significantly by industry. Biweekly pay dominates, but construction and other blue-collar industries favor weekly pay.

Source: BLS

• Construction has the highest weekly-pay rate: 65.4% of firms pay weekly. (BLS)
• Education & health services: 63.6% use biweekly pay. (BLS)
• 95.15% of Americans are paid via direct deposit. (SelectSoftware Reviews)
• Friday is the most common payday, followed by Thursday. (SelectSoftware Reviews)

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Paycheck Deductions

Between taxes, insurance premiums, and retirement contributions, the average American keeps just two-thirds to three-quarters of their gross pay.

• Most Americans have 29–33% of their paycheck taken for taxes. (CreditNinja)
• FICA taxes account for 7.65% of gross pay (6.2% Social Security + 1.45% Medicare). (IRS)
• Average 401(k) employer match: 4–6% of compensation. (Nasdaq, Fidelity)
• Employees contribute 16% of premiums for single health coverage ($1,440/yr) and 26% for family coverage ($6,850/yr). (NIS Benefits)
• Average health insurance deductible (single): $1,886, up 17% over 5 years. (NIS Benefits)
• Workers spend more than one-third of their paycheck within 12 hours of payday. (FitSmallBusiness)
• 49.14% of employees would find it very difficult if pay was delayed by just one week. (SelectSoftware Reviews)

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Payroll Errors

Payroll mistakes are far more common than most people realize — and they carry serious financial and legal consequences for employers and employees alike.

• Approximately 20% of payroll cycles contain errors. (Paycom)
• The average payroll error rate is 1.2% per pay period. (Paycom)
• A 1.2% error rate for 100 employees at $900/week = $56,647/year in losses. (Paycom)
• Global mean payroll accuracy: just 78%. (Paycom)
• 82 million US workers have experienced paycheck errors. (UKG)
• 44% of employees have found at least one payroll mistake. (UKG)
• 64% of employees experienced financial stress due to paycheck errors. (UKG)
• 53% of workers would consider leaving over continued payroll problems. (HR Morning)
• 50% would look for a new job after just 2 payroll errors. (SelectSoftware Reviews)
• 41% of payroll teams spend 4–10 extra hours per cycle correcting errors. (Paycom)
• Average cost to correct a single payroll error: $291. (Paycom)
• 40% of small-to-mid-size businesses face IRS penalties; average penalty: $845. (FitSmallBusiness)
• Employers make 15 corrections per pay period on average. (HR Dive / EY)

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Payroll Software Market

The payroll software industry is booming as businesses move away from manual processes — but many still rely on spreadsheets.

• The global payroll market is valued at $7.86 billion in 2026, projected to reach $15.21 billion by 2035. (Business Research Insights)
• The US payroll services market: $8.91 billion in 2026. (Mordor Intelligence)
• ADP leads the market with 9.9% market share, serving 1M+ businesses. (SelectSoftware Reviews)
• Paychex reached 12% market share after its $4.1B Paycor acquisition in April 2025. (SelectSoftware Reviews)
• 51% of organizations still use spreadsheets for payroll; 19% rely on manual processes. (SelectSoftware Reviews)
• Only 4% of employers use AI for payroll; fewer than 10% plan to. (SelectSoftware Reviews)
• 85% of organizations report problems with their payroll technology. (SelectSoftware Reviews)
• Labor costs represent 70.4% of total business expenses. (SelectSoftware Reviews)
• Payroll software costs range from $20–$180/month base plus $4–$12 per employee. (Homebase)
• DIY payroll takes 5–10 hours/month in staff time. (Homebase)

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Wage Growth & 2026 Salary Projections

After years of inflation eroding real wages, workers are finally seeing modest real gains — but not enough to make up for lost ground.

• Nominal wages grew 4.3% year-over-year (January 2025 to January 2026); inflation at 2.4% = approximately 1.9% real growth. (BLS)
• Real wages rose just 11.9% from 2006 to 2025 after adjusting for inflation, despite a 78.7% nominal increase. (USAFacts)
• Wage growth has outpaced inflation since February 2024. (USAFacts)
• 2026 total salary increase budgets: 3.5% (Mercer), 3.4% (WTW) — flat vs. 2025. (Mercer, WTW)
• Merit increases projected at 3.2% for 2026. (Mercer)
• 61% of employers expect the economy to moderately or significantly impact compensation decisions. (Mercer)
• Employers plan to promote approximately 9% of their workforce (down from 10%), with an 8.7% average raise for promotions. (Mercer)
• Compensation costs for private industry workers increased 3.4% in the 12 months ending December 2025. (BLS Employment Cost Index)

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Total Compensation Breakdown

Wages tell only part of the story. Benefits add roughly 30% on top of base pay for private-sector workers — and even more for government employees.

Source: BLS Employer Costs for Employee Compensation (ECEC), June 2025

• Private-sector benefits cost $13.58/hour per worker — 29.8% of total compensation. (BLS)
• State and local government workers receive $24.63/hour in benefits alone — nearly double the private sector. (BLS)

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Key Takeaways

1. Payroll errors are endemic: 1 in 5 payroll cycles contains an error, and 82 million workers have been affected. The average correction costs $291.
2. Direct deposit dominates: 95% of Americans receive pay electronically, with biweekly pay on Fridays as the most common pattern.
3. Deductions eat a third of pay: Between FICA, income taxes, health premiums, and retirement contributions, workers keep roughly 67–71 cents of every dollar earned.
4. The payroll software market is exploding: From $7.86B in 2026 to a projected $15.21B by 2035, yet 51% of businesses still use spreadsheets.
5. Real wage growth is modest: Despite 4.3% nominal growth, real wages only increased ~1.9% in the past year — and only 11.9% total over the last two decades.

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Last updated: February 2026. All data sourced from the Bureau of Labor Statistics (BLS), Internal Revenue Service (IRS), Mercer, UKG, Paycom, SelectSoftware Reviews, and other cited sources. For corrections or data requests, contact the MakeMyPaystub research team.