Companies in this industry generate paychecks, payroll reports, and tax filings for clients. Major companies include ADP, Ceridian, Insperity, and Paychex, all based in the US, as well as Canada's Nethris (a part of Groupe CGI), Brazil's Populis Serviços, and India's Neeyamo.
Demand for payroll services is driven by employment. The profitability of individual companies depends on 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 more than 70% of industry revenue; the four largest companies account for about 50%.
Products, Operations & Technology
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.