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Payroll Leaders: States with High-Earning Firms (2022)



By: Jack Nicholaisen author image
Business Initiative

Location matters when it comes to employee compensation. Our analysis of the U.S. Census Bureau’s Annual Business Survey reveals significant variations in payroll across states, offering crucial insights for businesses planning their next move.

State-by-State Payroll Analysis

Key Finding: In 2022, California led the nation with an average annual payroll of $7,215 per firm, significantly above the national average of $1,210.

Top 10 States by Average Payroll

📊 Comprehensive Analysis

Business Size Impact on Payroll

Understanding how business size affects payroll can help you plan your growth strategy. Our analysis shows significant variations across different company sizes.

Industry Leaders in Compensation

Different industries show distinct payroll patterns, with some sectors consistently offering higher compensation.

🔍 Deep Dive: The Numbers

State-Level Statistics

  • Total Firms Analyzed: 60,088,950.0
  • Total Annual Payroll: $72,721,968,766
  • National Average: $1,210 per firm

Size Distribution

  • Small Businesses (1-49 employees): Represent the majority of firms
  • Mid-Size (50-249 employees): Show consistent payroll growth
  • Large Enterprises (250+ employees): Lead in total payroll volume

Industry Insights

  • Top Paying Sector: Management
  • Most Firms: Professional Services
  • Highest Total Payroll: Health Care

🎯 Strategic Implications

  1. Location Strategy:
    • Consider state-specific payroll trends
    • Factor in regional cost variations
    • Evaluate talent pool availability
  2. Growth Planning:
    • Align expansion with industry benchmarks
    • Consider optimal business size targets
    • Plan for payroll scaling
  3. Competitive Positioning:
    • Benchmark against industry standards
    • Consider regional market rates
    • Factor in business size dynamics

Important Notes

  • Data Suppression: Some data points may be suppressed (marked as ‘S’) to protect business confidentiality
  • Averages vs. Medians: State-level averages may be influenced by large employers
  • Industry Mix: Payroll variations often reflect different industry concentrations
  • Size Impact: Business size significantly affects average payroll figures

Ready to Make Your Move?

Whether you’re launching a new venture or expanding existing operations, understanding regional payroll patterns is crucial. Register with Business Initiative to access:

  • Detailed state-by-state analysis
  • Industry-specific payroll benchmarks
  • Expert guidance on location strategy
  • Size-based growth planning tools

Source: U.S. Census Bureau Annual Business Survey (ABS) 2022
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About the Author

jack nicholaisen
Jack Nicholaisen

Jack Nicholaisen is the founder of Businessinitiative.org. After acheiving the rank of Eagle Scout and studying Civil Engineering at Milwaukee School of Engineering (MSOE), he has spent the last 4 years disecting the mess of informaiton online about LLCs in order to help aspiring entrepreneurs and established business owners better understand everything there is to know about starting, running, and growing Limited Liability Companies and other business entities.