U.S. small businesses employ 62.3 million people, or 45.9 percent of all private sector workers, across 36,207,130 small businesses, according to the SBA Office of Advocacy's 2026 figures. Most of those businesses have no staff at all: 82.3 percent are nonemployer firms and only 17.7 percent have paid employees.
How many people do small businesses employ in 2026?
The SBA Office of Advocacy's Frequently Asked Questions About Small Business 2026, released in February 2026, is the standard reference. It reports 36,207,130 small businesses in the United States employing 62.3 million people — 45.9 percent of the private sector workforce. Small businesses also generate 43.5 percent of GDP.
One number is worth pausing on: small businesses account for 45.9 percent of private sector employment but only 38.7 percent of total private sector payroll. That gap reflects a real difference in average pay and in industry mix — small firms are concentrated in services, retail, hospitality, and trades, while the highest-paying sectors skew toward large employers. It also means the small business share of the labour market is larger in people than it is in dollars.
How many small businesses actually have employees?
Far fewer than the headline count suggests. Of the 36.2 million small businesses, 82.3 percent are nonemployer firms — sole proprietors, independent contractors, and single-member companies with no payroll — and just 17.7 percent employ anyone. Census data puts the nonemployer count at 30,427,808 establishments in 2023.
On the employer side, Census Business Dynamics Statistics counted 5.58 million employer firms with 1 to 499 employees in 2023, up from 5.53 million in 2022. So when a statistic describes small business hiring, payroll, or benefits, it is describing that smaller group. Any owner who has crossed from solo work into a first hire has moved between two statistically very different worlds, which is why the first employee is such a consequential step.
How many jobs do small businesses create?
Between January 1995 and December 2024, small businesses created 20.7 million net new jobs, according to the Office of Advocacy. Net is the key word: that figure is jobs created by openings and expansions minus jobs lost to closures and contractions over three decades. Small firms both create and shed jobs at higher rates than large firms, and the net contribution is what remains after that churn.
The practical read is that job creation in the U.S. is not concentrated in a few large employers — it is spread across millions of small operations each adding one or two roles. That is also why small business hiring is such a sensitive economic indicator: it turns quickly, because a single owner deciding to wait one more quarter before hiring is a decision repeated a million times.
What hiring means for your cash flow
Payroll is the least forgiving expense a small business takes on. It lands every two weeks regardless of whether your customers have paid, and it arrives with employer taxes, workers compensation, and often benefits attached. Most owners who struggle after a hire have not misjudged the demand — they have misjudged the timing gap between paying the new person and collecting on the work that person does. Building a payroll buffer before the start date, not after, is what turns a good hire into a sustainable one. Our guide on how to onboard a new employee covers the operational side.
Where a buffer is not there yet, funding can cover the gap. The Broker Shop is a small business funding broker, not a funder: one application puts more than 50 lenders in competition for your file and matches you with those whose guidelines you meet. Compare the funding options before you commit to a hire, and it is free to apply — checking your options won't affect your credit score.
Frequently Asked Questions
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One 2-minute application is matched to the funders whose guidelines you meet. It's free, and checking your options won't affect your credit score.
See What I Qualify For →The bottom line: Small businesses employ 62.3 million people and nearly half the private workforce, but only 17.7 percent of them have any employees at all — which is why the jump from solo owner to first payroll is the biggest cash flow step most businesses take.
Sources: SBA Office of Advocacy — Frequently Asked Questions About Small Business 2026 · SBA Office of Advocacy — FAQs About Small Business 2026 (full PDF) · U.S. Census Bureau — Census Bureau Data Tell the Small Business Story
Found these figures useful? You are welcome to cite or link to this page. Suggested attribution: “Small Business Employment Statistics 2026,” The Broker Shop — thebrokershopinc.com/small-business-employment-statistics-2026.html. Every figure links to its original primary source.