Business Description

Description of business: Paychex, Inc. and its wholly owned subsidiaries (collectively, the “Company” or “Paychex”) is an industry-leading human capital management (“HCM”) company delivering a full suite of technology and advisory solutions in human resources (“HR”), employee benefit solutions, insurance and payroll for customers and their employees in the United States (“U.S.”) and parts of Europe. The Company also has operations in Canada, India, and Israel. Paychex, a Delaware corporation formed i n 1979, reports as a single segment. Refer to Note R of this Item 8 for further discussion of the Company’s segment reporting for each of the fiscal years ended May 31, 2026 (“fiscal 2026”), May 31, 2025 (“fiscal 2025”), and May 31, 2024 (“fiscal 2024”) and as of May 31, 2026 and 2025. The Company offers a full range of integrated HCM solutions covering the employee life cycle for businesses and their employees. Customers may choose from a breadth of solutions that also allow integration with some of the most popular HR, accounting, point-of-sale, and productivity applications on the market today. Paychex’s offerings often leverage the information gathered in its base payroll processing service, allowing the Company to provide comprehensive outsourcing services covering the HCM spectrum. Paychex supports its customers through its proprietary, robust Paychex Flex ® platform, Paycor and the Company’s SurePayroll ® SaaS-based solutions. These solutions allow users to process payroll when they want, how they want, and on any type of device (desktop, tablet, and mobile phone). Paychex’s larger customers generally have more complex payroll and employee benefit needs and can opt for an integrated suite of HCM solutions, which allows them to choose the service and software solutions that will meet the needs of their businesses. Total revenue is comprised of service revenue and interest on funds held for clients. Service revenue is comprised primarily of the fees earned on the portfolio of HCM services, which include payroll processing, complementary HR management and administration services, professional employer organization (“PEO”) solutions, and insurance agency commissions. Refer to Note B of this Item 8 for further discussion of the Company’s service revenue.