September 30, 2026

What we're seeing

• Profitability moderates slightly: Our proxy for business profitability moderated slightly in August, but revenues continued to exceed expenses, indicating that small businesses remain financially resilient.
• Payroll expense growth remains stable: The net share of businesses expanding payrolls year-over-year remained essentially unchanged in August (18%), and median payroll growth came in at 5%, pointing to a stabilization in payroll expansion following strong growth through April 2026.
• Payroll isn't just a routine back-office task: Small businesses are balancing cash-flow pressure to meet payroll amid hiring challenges, while using AI to augment (not replace) existing capabilities.