Pay & Compensation
Average hourly wages at small businesses that run payroll with Homebase were 6.8% higher in September than a year earlier, the fastest year-over-year growth since January, according to the company’s September Main Street Health Report.
The average hourly wage in that group reached $16.76, up from $16.52 in August, a 1.4% month-over-month increase. Homebase says average hourly wages are now 47.4% above their January 2022 level.
A modest uptick after months in the mid-6% range
Homebase’s wage-growth series has cooled sharply from the double-digit rates it recorded through 2023 and into mid-2024, but the path since then has not been a straight line. Growth rebounded to 8.2% in December 2025, then eased to 7.3% in January and to 6.4% by April. It held at 6.5% from May through July before rising to 6.7% in August and 6.8% in September.
Homebase describes the result as a mild uptick after seven months in the mid-6% range and says wage growth “has stopped decelerating and may even be warming a little.” A 0.1-point increase is a small move, and one month does not establish a new trend.
Pay levels also differ widely by industry. In September, average hourly wages in the Homebase payroll group were $21.05 in health care, $18.79 in professional services, $16.03 in retail, $15.20 in entertainment and $14.24 in food and drink.
Another small-business wage measure is much cooler
Paychex reported a different picture. Its Small Business Employment Watch, released September 29, put 12-month hourly earnings growth at 2.78% for workers at businesses with fewer than 50 employees, “extending a more than two-year trend of moderating wage growth.”
The two figures are not contradictory, because they measure different things for different employers:
- Homebase measures average hourly wages at locations that ran Homebase Payroll in both September 2026 and September 2025. Its customers are hourly Main Street businesses.
- Paychex draws on payroll data from roughly 350,000 of its clients with fewer than 50 employees. It includes overtime, commissions and tips but excludes bonuses, and its wage figures are seasonally adjusted.
Because the customer bases, wage definitions and adjustments differ, neither figure is the U.S. wage-growth rate, and the gap between them should not be read as one measure being wrong. The official national benchmarks remain federal series such as the Bureau of Labor Statistics’ average hourly earnings.
What workers and employers should watch
For hourly workers, the uptick in the Homebase group suggests employers in some Main Street industries are still raising pay even while hiring and hours remain soft. For employers in those industries, it suggests labor costs may stay elevated even if staffing levels are not expanding.
The question is persistence. If Homebase wage growth keeps edging up while Paychex and federal measures stay cooler, the divergence would point to conditions specific to hourly service businesses rather than a national reacceleration in pay. Homebase’s next report is scheduled for November 4.
Sources
- Homebase, Main Street Health Report — September 2026. https://www.joinhomebase.com/data/september-2026-main-street-health-report
- Paychex, “U.S. Small Business Employment Rate Remains Steady in September,” Small Business Employment Watch, September 29, 2026. https://www.paychex.com/newsroom/news-releases/small-business-employment-watch-september-2026
- Paychex Small Business Employment Watch methodology and data. https://www.paychex.com/employment-watch/
Featured photo: A barista prepares a drink at The Interval, a cafe and bar in San Francisco, in 2014. Representative image of hourly service work; the business is not identified as a Homebase or Paychex customer. Photo: Christopher Michel, via Wikimedia Commons (CC BY 2.0). Cropped from the original.
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