Small Business Employment Statistics
Last updated: 2026-10-28 · 9 sourced statistics
Small businesses employ nearly half of the US private-sector workforce. The SBA Office of Advocacy's February 2026 fact sheet puts small-firm employment at 62.3 million people, 45.9% of private-sector employees, using Census data for 2022, and credits small firms with 61% of net new jobs from 1995 to 2024. But the jobs are not spread evenly: firms with fewer than 20 employees are 89.4% of employer firms yet hold 16.2% of private-sector jobs. Below are the employment, payroll and job-creation figures, each from the SBA, the Census Bureau or the Bureau of Labor Statistics, with the year and definition stated.
Key takeaways
- Small businesses employed 62.3 million people in 2022, 45.9% of private-sector employees, and paid 38.7% of private-sector payroll, $3.5 trillion (SBA Office of Advocacy).
- From 1995 to 2024, small businesses created 20.7 million net new jobs and large businesses 13.2 million, a 61% small-business share (SBA Office of Advocacy).
- Firms with fewer than 20 employees made up 89.4% of employer firms but 16.2% of employment in 2022 (our calculation from Census SUSB).
- Payroll per employee averaged about $55,700 at firms with fewer than 500 employees, against $66,000 across all firms (our calculation from Census SUSB, 2022).
- In the fourth quarter of 2025, firms with 1 to 49 employees added a net 194,000 jobs, more than either larger size class (BLS).
At a glance.
Every figure on this page in one table, each linked to its named source. Scroll down for the full context behind each number.
| Figure | What it measures | Source | Year |
|---|---|---|---|
| 62.3M | Small businesses (fewer than 500 employees) employed 62.3 million people in 2022, 45.9% of all private-sector employees. | SBA Office of Advocacy, Frequently Asked Questions About Small Business (February 2026) | 2022 |
| 38.7% | Small businesses paid 38.7% of private-sector payroll in 2022, about $3.5 trillion. | SBA Office of Advocacy, Frequently Asked Questions About Small Business (February 2026) | 2022 |
| 61% | From January 1995 to December 2024, small businesses created 20.7 million net new jobs and large businesses 13.2 million, so small businesses accounted for 61% of net new job creation. | SBA Office of Advocacy, Frequently Asked Questions About Small Business (February 2026) | 2024 |
| 9.1M | Of the more than 15 million jobs lost between the first and second quarters of 2020, 9.1 million were at small businesses; small-business employment recovered those jobs by the third quarter of 2022 and added 1.6 million more. | SBA Office of Advocacy, Frequently Asked Questions About Small Business (February 2026) | 2024 |
| 56.6% | Small businesses accounted for 56.6% of employment in rural areas in 2022, compared with 47.5% in metropolitan areas. | SBA Office of Advocacy, Frequently Asked Questions About Small Business (February 2026) | 2022 |
| 89.4% | Firms with fewer than 20 employees were 89.4% of the 6.40 million US employer firms in 2022 but employed 16.2% of the 135.7 million private-sector workers (our calculation from the Census table). | US Census Bureau, Statistics of U.S. Businesses 2022, U.S. and states by detailed employment size | 2022 |
| 63.0% | Firms with fewer than five employees were 63.0% of employer firms in 2022 and employed 4.6% of private-sector workers (our calculation from the Census table). | US Census Bureau, Statistics of U.S. Businesses 2022, U.S. and states by detailed employment size | 2022 |
| $55,700 | Annual payroll per employee averaged about $55,700 at firms with fewer than 500 employees in 2022, compared with about $66,000 across all employer firms and about $74,800 at firms with 500 or more (our calculation from the Census table). | US Census Bureau, Statistics of U.S. Businesses 2022, U.S. and states by detailed employment size | 2022 |
| +194,000 | In the fourth quarter of 2025, firms with 1 to 49 employees had a net employment increase of 194,000, firms with 50 to 249 employees a net gain of 138,000, and firms with 250 or more employees a net gain of 126,000 (seasonally adjusted). | US Bureau of Labor Statistics, Business Employment Dynamics: Fourth Quarter 2025 (USDL-26-1268, July 29, 2026) | 2025 |
The statistics
Small businesses (fewer than 500 employees) employed 62.3 million people in 2022, 45.9% of all private-sector employees.
Source:SBA Office of Advocacy, Frequently Asked Questions About Small Business (February 2026)2022
Small businesses paid 38.7% of private-sector payroll in 2022, about $3.5 trillion.
Source:SBA Office of Advocacy, Frequently Asked Questions About Small Business (February 2026)2022
From January 1995 to December 2024, small businesses created 20.7 million net new jobs and large businesses 13.2 million, so small businesses accounted for 61% of net new job creation.
Source:SBA Office of Advocacy, Frequently Asked Questions About Small Business (February 2026)2024
Of the more than 15 million jobs lost between the first and second quarters of 2020, 9.1 million were at small businesses; small-business employment recovered those jobs by the third quarter of 2022 and added 1.6 million more.
Source:SBA Office of Advocacy, Frequently Asked Questions About Small Business (February 2026)2024
Small businesses accounted for 56.6% of employment in rural areas in 2022, compared with 47.5% in metropolitan areas.
Source:SBA Office of Advocacy, Frequently Asked Questions About Small Business (February 2026)2022
Firms with fewer than 20 employees were 89.4% of the 6.40 million US employer firms in 2022 but employed 16.2% of the 135.7 million private-sector workers (our calculation from the Census table).
Source:US Census Bureau, Statistics of U.S. Businesses 2022, U.S. and states by detailed employment size2022
Firms with fewer than five employees were 63.0% of employer firms in 2022 and employed 4.6% of private-sector workers (our calculation from the Census table).
Source:US Census Bureau, Statistics of U.S. Businesses 2022, U.S. and states by detailed employment size2022
Annual payroll per employee averaged about $55,700 at firms with fewer than 500 employees in 2022, compared with about $66,000 across all employer firms and about $74,800 at firms with 500 or more (our calculation from the Census table).
Source:US Census Bureau, Statistics of U.S. Businesses 2022, U.S. and states by detailed employment size2022
In the fourth quarter of 2025, firms with 1 to 49 employees had a net employment increase of 194,000, firms with 50 to 249 employees a net gain of 138,000, and firms with 250 or more employees a net gain of 126,000 (seasonally adjusted).
When these numbers don't apply
Aggregate statistics hide a lot. Read these caveats before quoting a figure as if it describes your specific situation.
- "Small business" here means an independent firm with fewer than 500 employees, the SBA Office of Advocacy's research definition. Government contracting size standards differ by industry.
- The employment and payroll shares come from the Census Bureau's Statistics of U.S. Businesses for 2022, which counts employer firms only and measures employment in mid-March. The 29.8 million businesses with no employees are not in these figures.
- Firm size is measured at the whole-company level. A chain of small shops owned by one large company counts as a large firm, even if each shop has a handful of staff.
- The SBA's net new jobs share uses dynamic sizing: when a growing small firm passes 500 employees, its later growth counts as large-firm growth. Advocacy notes the small-firm share would be higher if firms kept their original size class.
- The Business Employment Dynamics figures are one quarter's seasonally adjusted net change and are revised with each release. Do not read a single quarter as a trend.
- Pay per employee figures are annual payroll divided by mid-March employment, so part-time and part-year jobs pull the average down. They are not average wages for full-time workers.
How we compiled this data
Reviewed on 2026-10-28. Every figure was read at its primary source that day. Small business employment, payroll, net new jobs, pandemic job loss and rural figures come from the SBA Office of Advocacy's "Frequently Asked Questions About Small Business" (February 2026), read through its Internet Archive copy because the SBA site blocked automated access. Firm-size shares and payroll per employee are our calculations from the Census Bureau's 2022 Statistics of U.S. Businesses file us_state_naics_detailedsizes_2022; its fewer-than-500 totals (62.25 million employees, 45.9%) match the SBA figures. Quarterly firm-size job changes come from the BLS Business Employment Dynamics release for the fourth quarter of 2025, read through its Internet Archive copy; the first quarter 2026 release was scheduled for October 28, 2026, the day of this review, and was not used. We removed the previous version's figures that linked only to the Advocacy homepage (61.6 million, roughly 63% of net new jobs, and an imprecise firm-size claim, all now replaced with the February 2026 edition), a QuickBooks 'hiring drag' claim with no figure, and a Nacha direct deposit figure that is about payroll payments rather than employment.
We hand-collected each figure from its original publisher rather than recycling secondary round-ups, cross-checked the headline numbers against the source documents in 2026-10-28, and link every statistic to the report it came from so you can verify it yourself. Where a publisher issues annual updates, we cite the report edition and flag the year inline.
Frequently asked questions
How many people work for small businesses in the US?
62.3 million people in 2022, or 45.9% of private-sector employees, according to the SBA Office of Advocacy's February 2026 fact sheet based on Census data. Small business here means a firm with fewer than 500 employees.
Do small businesses create most new jobs?
Over the long run, yes. From 1995 to 2024, small businesses created 20.7 million net new jobs and large businesses 13.2 million, a 61% small-business share. Quarter to quarter it varies: in the fourth quarter of 2025, firms with 1 to 49 employees added a net 194,000 jobs, against 126,000 at firms with 250 or more.
If small firms create 61% of net new jobs, why do they employ less than half of workers?
Because successful small firms grow out of the category. Once a firm passes 500 employees, its further hiring counts as large-firm job creation, so the small-business share of employment stays below its share of job creation.
How many employees does a typical small business have?
Very few. In 2022, 63.0% of US employer firms had fewer than five employees and 89.4% had fewer than 20. Those under-20 firms employed 16.2% of private-sector workers between them.
Do small businesses pay less than large ones?
On average, payroll per employee is lower. In 2022 it was about $55,700 at firms with fewer than 500 employees, against about $74,800 at larger firms. The figures are payroll divided by employee headcount, so differences in part-time work and industry mix explain part of the gap.
Put these figures to use
- Payments hub: Guides to getting invoices paid on time, so cash is there when payroll is due.
- Late fee calculator: Work out a late fee on an overdue invoice before you add it.
- Hiring your first employee: US federal steps for a first hire, a worked cost example and how payroll differs from invoicing.
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