Small Businesses Add 28,000 Jobs as Pay Rises 4.0%: September 2026 Gusto Small Business Jobs and Pay Report

Key Takeaways

• September extended the streak of small business job gains to eight straight months, at +28,000 job growth picked up from August, though it remained below the 12-month average.

• Pay kept climbing as hiring picked up. Average hourly earnings were up 4.0% year-over-year to $37.40 an hour, and starting pay for new hires rose 3.1% to $25.80 an hour.

• Micro-businesses are leading the hiring gains. Companies with just 5–9 employees added +13,000 net jobs in September — more than any other size tier for the second straight month, outpacing the 20–49 employee tier (+6,000) and the 10–19 tier (+5,200). 

• Workers out West are seeing the biggest paychecks grow the fastest. Average hourly earnings in the West rose 5.3% year-over-year to $42.00 an hour, the highest wage growth and the highest pay of any U.S. region.

September was a solid month for small business job growth, with America’s small businesses adding an estimated +28,000 net new jobs on a seasonally adjusted basis. September’s gain marks the eighth consecutive month of positive net hiring following January’s dip, and a slight pickup from August, which was revised down to +18,500, though the pace remained below the 12-month average as hiring continued at a cooler pace compared to earlier in the year.

Beneath the headline, hiring stayed broad. Healthcare and social assistance led all sectors for the eighth straight month with +13,000 net hires, followed by other services (+3,400) and construction (+2,500). 14 of 19 sectors posted positive net hires. All four U.S. regions added jobs, led by the South at +13,000, and every company size tier stayed in positive territory.

Pay kept climbing. Average Hourly Earnings, the average wage across small business employees, reached $37.40 an hour in September, up 4.0% from one year earlier, and starting pay for newly hired workers was up 3.1% from last year.

The Gusto Small Business Jobs and Pay Report provides a real-time view of hiring and pay among U.S. small businesses on Gusto. All figures are based on anonymized payroll data and are statistically weighted to be nationally representative by size, industry, region, and company age. We track America’s small business economy of companies with fewer than 50 employees.

The Big Picture

At +28,000, September’s seasonally adjusted net hires came in slightly below the 12-month average of +34,000. Here’s how the month compares to the recent trend:

• May 2026: +38,000 net hires

• June 2026: +36,000 net hires

• July 2026: +40,000 net hires

• August 2026: +19,000 net hires

On pay, Average Hourly Earnings reached $37.40 in September, up 4.0% from a year earlier. Year-over-year small business wage growth has hovered around 4% for much of 2026, ranging from about 3.9% to 4.6%.

New hires are seeing raises too: the New Hire Pay Index was up 3.1% year over year, to about $25.80 an hour. Explore the live pay charts on Gusto’s Real-Time Economic Data page.

Prior months were revised with this release. Compared with last month’s report, August was revised down to +18,500 (from +29,500), and July was revised down to +39,700 (from +42,400). As always, the most recent months are subject to revision as additional payroll data arrives.

Sector Breakdown

Healthcare led all sectors for the month with +13,000 net hires, extending its run atop the rankings. 

Regional Breakdown

All four U.S. regions posted positive net hires in September. The South held its position atop all regions again in September at +13,000 net hires, up from +9,300 in August. The West came in second at +7,500, followed by the Midwest at +4,300 and the Northeast at +3,000. 

As for pay, the West led pay growth at 5.3% year over year in September, and it also has the highest average hourly earnings of any region at $42.00. The Northeast and the South grew at about the national rate of 4.0%. The Midwest trailed with 3.0% growth, and its average hourly earnings of $32.91 are the lowest of the four regions.

Company Size Breakdown

All four company size tiers posted positive net hires in September. The 5–9 employee tier led for a second straight month at +13,000, well ahead of the 20–49 tier (+6,000) and the 10–19 tier (+5,200). The smallest 1–4 employee businesses added +3,600. All tiers were positive this month.

Methodology

The Gusto Small Business Jobs and Pay Report tracks anonymized payroll data from a stratified random sample of roughly 100,000 small businesses across the United States with 1–49 employees, drawn from the 500,000+ companies on Gusto. All figures in this report are seasonally adjusted unless otherwise noted.

To ensure the findings represent small businesses across the United States, Gusto uses a two-stage weighting process. First, we randomly select a representative sample of companies (roughly 100,000 businesses annually) that match the national distribution of small businesses by industry, company size, and geographic region, using U.S. Bureau of Labor Statistics “Quarterly Census of Employment and Wages” data as a benchmark. Second, we adjust the sample to reflect the national distribution of company ages based on data from the Census Bureau’s “Business Dynamics Statistics.”

This report provides three key hiring metrics for small businesses each month: Hires (new employees starting work), terminations (employees leaving for any reason), and net hires (the difference between hires and terminations, showing whether small businesses are creating or losing jobs overall). All data are seasonally adjusted using the U.S. Census Bureau’s X-13ARIMA-SEATS methodology.

We also track two small business pay measures: Average Hourly Earnings and the New Hire Pay Index (the average starting wage for newly hired workers, reported as a three-month rolling average). Both are seasonally adjusted.