Paychex, Inc. PAYX

The business

Paychex runs payroll for roughly 800,000 mostly small American businesses: the restaurant with nine employees, the dental practice, the regional contractor. It calculates the withholding, files the returns, and moves the money. Around that sits the more interesting half: acting as co-employer through the professional employer organisation, selling health insurance into the same base, and administering 130,000 retirement plans holding $66.0B of participant assets.

There is a quiet third business nobody markets. Paychex holds client payroll funds between the debit and the payment date and keeps the interest. That produced $210.9M last year, up 30%, and it is entirely a function of short-term rates rather than of anything Paychex does.