Nearly Every US Employer Is a Small Business

Companies and Brands

Published: January 7, 2022 12:06 pm

Last Updated: January 7, 2022 12:17 pm

When it comes to defining a small business, most of us think really small. And we would be right. How a small business is defined makes a big difference. Using one set of standards, a small business would have no more than four employees, while under another set, 500 employees is the cutoff point.

A new report from the Congressional Research Service presents nonfarm employer data from 2019, with several data points broken out by the number of employees. The report is titled “Small Business Size Standards: A Historical Analysis of Contemporary Issues.”

The following table presents summary data on the number of U.S. firms broken down by the number of employees. Data on self-employed Americans was not included because it was not available for 2019. In 2018, there were 26.49 million Americans who were self-employed.

Number of employees/firm	Number of firms	Cumulative percent of total firms	Total employment	Cumulative percent of total employment	Annual Payroll	Cumulative percent of total payroll
0–4	3,556,927	61.6%	5,632,339	4.3%	$283.5 billion	3.4%
5–9	959,641	78.3%	6,329,828	9.3.%	$257.6 billion	7.5%
10–19	609,355	88.8%	8,211,284	15.7%	$347.8 billion	12.3%
20–99	532,972	98.0%	20,893,780	31.8%	$960.9 billion	25.6%
100–499	92,159	99.6%	18,235,627	46.0%	$1.01 trillion	39.5%
500+	20,256	100.0%	69,695,369	100.0%	$4.4 trillion	100.0%
Total	5,771,290		128,898,227		$7.23 trillion

We note a few standout data points:

More than 60% of all U.S. firms have four or fewer employees.
Just 0.4% of all firms have more than 500 employees.
The largest firms employ 54% of Americans.
The largest firms pay 60.5% of all U.S. salaries.

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