Payroll Services Global Market Report 2024

The payroll services market size has grown steadily in recent years. It will grow from $75.21 billion in 2023 to $77.63 billion in 2024 at a compound annual growth rate (CAGR) of 3.2%. The growth observed in the historical period can be attributed to complex payroll regulations, the growth of small and medium-sized enterprises (SMEs), globalization of businesses, a focus on core competencies, competition for talent, and the pursuit of cost savings and efficiency.

The payroll services market size is expected to see steady growth in the next few years. It will grow to $89.97 billion in 2028 at a compound annual growth rate (CAGR) of 3.8%. The anticipated growth in the forecast period can be attributed to trends in remote work and the gig economy, compliance with evolving regulations, concerns about cybersecurity, the demand for customization and scalability, and strategic workforce planning. Major trends in the forecast period include the integration of artificial intelligence and automation, technological advancements, increased adoption of cloud-based payroll solutions, the implementation of employee self-service portals, and the expansion of global payroll services.

The payroll services market is anticipated to experience significant growth in the foreseeable future, propelled by the escalating proliferation of mobile devices and the internet. Mobile devices, characterized by their compact, hand-held nature and multifunctionality, are becoming integral tools for communication. Many companies are capitalizing on this trend by introducing payroll apps, offering enhanced user convenience, accessibility, and the potential to boost employee engagement and overall business productivity. This trend aligns with the global surge in internet usage, as reported by the International Telecommunication Union in November 2022, indicating a rise from 4.9 billion users in 2021 to 5.3 billion in 2022. Consequently, the increasing adoption of mobile devices and internet connectivity is a key driver for the growth of the payroll services market.

The payroll services market is poised for expansion, driven by the growing prevalence of remote work practices. Remote work involves carrying out job responsibilities from locations outside the traditional office setting, leveraging technology for communication and task completion. Payroll services play a crucial role in supporting remote work by ensuring the seamless and accurate processing of employee salaries, tax deductions, and compliance, regardless of the employees' physical locations. A notable example is the statistics provided by the Labour Market Information Council in September 2023, stating that over 25% of core-age employees in Canada were engaged in remote work in 2021. As remote work continues to gain prominence, the demand for effective payroll services is expected to grow, further contributing to the expansion of the market.

Technological advancements have emerged as a prominent trend gaining traction in the payroll services market, with companies actively adopting new technologies to maintain their competitive positions. A notable example is HiBob, a Germany-based modern HR technology company, which introduced the Payroll Hub in December 2021. This innovative feature serves as a central dashboard on the Bob platform, automatically updating payroll information for businesses. The Payroll Hub empowers managers to ensure the accuracy of data for upcoming pay cycles, effectively saving time and reducing the risk of errors. Notably, it seamlessly integrates with leading payroll providers such as ADP Workforce Today, CloudPay, TriNet, Paylocity, among others. The Payroll Hub caters to the unique demands of midsized businesses by supporting both single-cycle and multi-cycle schedules, showcasing the industry's commitment to leveraging technology for enhanced efficiency and accuracy in payroll services.

Major companies in the payroll services market are actively concentrating on the development of automated payroll management solutions to meet the evolving needs of the industry. Automated payroll management solutions leverage technology to streamline and enhance the efficiency of the employee payment process. For example, in September 2023, RazorpayX, the business banking platform of Razorpay based in India, introduced the Payroll Platform. Initially designed for startups, this platform has expanded its services to cater to enterprises and large-sized businesses. The newly enhanced system for integrations and customizations further amplifies its capabilities. After successfully onboarding approximately 13,000 organizations, including startups and SMEs, in the past four years, RazorpayX Payroll is now extending its support to businesses of all sizes, ranging from 2 to 20,000+ employees. The platform aims to assist large organizations in achieving substantial cost savings of over 60% on payroll management while ensuring 100% accuracy in compliance. This reflects a strategic commitment to leveraging automation technology for more efficient and accurate payroll services across a broad spectrum of businesses.

In November 2022, Deel, a privately held payroll and compliance provider based in the United States, successfully completed the acquisition of PayGroup Limited for an estimated $80 million. This strategic move serves to expand Deel's client base within the Asia-Pacific region, consolidating its standing as a prominent leader in the global payroll industry while simultaneously enhancing its capabilities in payroll and human capital management (HCM). PayGroup, an Australia-based company specializing in payroll and HCM solutions, now contributes to Deel's strengthened position and extended reach in the competitive landscape of the industry.

Major companies operating in the payroll services market report are International Business Machines Corporation, Deloitte Touche Tohmatsu, PricewaterhouseCoopers International Ltd., Ernst and Young Global Limited, KPMG International Limited, Automatic Data Processing Inc., HCL Technologies Limited, BDO International Inc., Intuit Inc., Insperity Inc., Workday Inc., Paychex Inc., Alight Solutions Inc., Sage Group PLC, Grant Thornton LLP, Paycom Software Inc., Ceridian Inc., Nethris Inc., Neeyamo Inc., Gusto Inc., Zalaris ASA, Papaya Global Inc., CloudPay Inc., Namely Inc., Keka Inc., OnPay Inc., HRMantra Software Pvt. Ltd., Infosys BPM, Vision H.R., Populis Servicos.

Asia-Pacific was the largest region in the payroll services market in 2023. The regions covered in the payroll services market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa. The countries covered in the payroll services market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

The primary categories of payroll services include payroll and bookkeeping services, tax preparation services, and other accounting services. These services cater to the needs of small businesses, medium-sized businesses, and large enterprises. Payroll and bookkeeping services involve the processes of paying and managing award rates to staff and the day-to-day financial management of the company. These services find application across various industry verticals, including BFSI (Banking, Financial Services, and Insurance), consumer and industrial products, IT and telecommunications, the public sector, healthcare, and other sectors.

The payroll services market research report is one of a series of new reports that provides payroll services market statistics, including payroll services industry global market size, regional shares, competitors with a payroll services market share, detailed payroll services market segments, market trends and opportunities, and any further data you may need to thrive in the payroll services industry. This payroll services market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenario of the industry.

The payroll services market includes revenues earned by providing time tracking integration, expense management, payroll reports, tax filing, and more. The market value includes the value of related goods sold by the service provider or included within the service offering. Only goods and services traded between entities or sold to end consumers are included.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD, unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.