Patriot Software’s 2025 small business survey, which polled 1,000 current owners, managers, and recent former owners, found that 47.7% of U.S. small business owners have skipped or delayed their own paycheck at least once to keep their business running. Additionally, 84.4% reported sacrificing their health, relationships, or mental well-being for the sake of their business.
The survey was conducted by Patriot Software, a cloud-based payroll and accounting platform that has served small businesses since 2002. Because the company operates in a category directly tied to owner financial stress, that context is worth considering when interpreting the findings. Even so, the headline figures closely align with independent research tracking similar behavior.
A separate Bluevine survey of 1,052 small business owners found that 62% had reduced or skipped their own pay at least once during the previous year, while 21% reported doing so four or more times. Taken together, the data suggest that owner compensation often functions less like a traditional salary and more like a financial shock absorber that is reduced or eliminated when cash flow comes under pressure.
Owner Paycheck Deferrals Have Become a Normal Part of Running a Small Business
The Patriot survey found that 47.2% of small business owners believe financial pressure has worsened over the past 12 months, while 53.5% lose sleep over their business at least several times per week. Those findings closely mirror Bluevine’s research, which found that 71% of owners experience moderate to extremely high financial stress and 68% lose at least one full night of sleep every month because of cash-flow concerns.
These figures point to something larger than a temporary response to a single economic disruption. NFIB’s Small Business Optimism Index has recorded sustained below-average sentiment through periods of inflation, rising interest rates, and fluctuating demand. The consistency of these findings suggests that financial strain has become a persistent feature of the small business environment rather than a short-term challenge.
The scale of the issue is significant. According to the U.S. Small Business Administration, more than 36 million small businesses operate in the United States and collectively employ 62.3 million people, representing nearly 46% of the private-sector workforce.
When nearly half of those business owners regularly absorb financial shocks through reductions in their own compensation, the impact extends well beyond individual households. Gusto’s 2026 payroll analysis estimated that more than 3 million employees at small businesses experienced a missed payroll in 2024. During that year, the share of small firms unable to process payroll because of insufficient funds rose to approximately 2.3%, up from roughly 1.5% in 2019. The increase suggests that owner self-sacrifice has not been enough to fully shield employees from growing cash-flow pressures.
Cash Flow Challenges Leave Small Business Owners as the First Financial Buffer
The mechanism behind paycheck deferrals is largely structural rather than behavioral.
Large employers typically maintain revolving credit facilities, treasury teams, and payroll reserves that allow them to smooth compensation regardless of short-term revenue fluctuations. Most small businesses lack those resources.
As a result, when a customer payment arrives late or an unexpected expense emerges, the owner’s draw often becomes the most flexible line item in the cash-flow statement. Intuit QuickBooks’ 2025 Late Payments Report found that 56% of small businesses had outstanding invoices at any given time and were owed an average of $17,500. Nearly half, 47%, reported invoices that were more than 30 days overdue. These delayed payments directly reduce the cash available for owner compensation.
Patriot’s survey also highlights how exposure varies by business maturity. The rate of paycheck skipping rises to 58.8% among new business owners, compared with 47.7% across the broader sample. This reflects the challenges businesses face before they establish reliable revenue streams, credit relationships, and working-capital reserves.
A Bill.com analysis of SMB spending during periods of economic uncertainty found that small businesses frequently postpone non-essential spending and rely on owner resources during “wait-and-see” periods. The pattern reinforces the idea that many owners effectively act as lenders of last resort for their own businesses.
The survey also revealed differences by gender. Among women business owners, 37% reported never having skipped a paycheck, compared with 24.3% of men. While the gap may reflect differences in business size, industry mix, or compensation practices, additional segmentation would be needed to draw firm conclusions.
Bluevine’s research provides further insight into the causes of compensation delays. It found that 29% of owners postponed paying themselves because customers failed to pay on time, while 17% missed or nearly missed employee payroll for the same reason. The findings illustrate a direct chain connecting receivables delays, owner compensation, and employee payroll.
Tax obligations add another layer of pressure. When quarterly estimated taxes, payroll tax deposits, and vendor payments compete for limited cash, owner compensation often becomes the only financial obligation that can be delayed without immediate penalties.
Skipping a Paycheck Creates Lasting Financial and Health Consequences
The consequences of repeatedly delaying owner compensation extend far beyond monthly cash-flow management.
Owners who forgo pay are not simply postponing personal spending. They are also delaying retirement contributions, reducing personal wealth accumulation, and limiting the development of credit profiles that could support future borrowing.
Bluevine’s burnout survey found that 53% of small business owners feel emotionally drained, while 13% reported losing six or more full nights of sleep each month because of financial stress. Research consistently links chronic stress to poorer decision-making and higher healthcare costs, both of which can create additional business challenges over time.
Healthcare emerged as a particularly important concern. Patriot found that 29.4% of owners identified affordable healthcare as the single policy change most likely to reduce burnout, making it the top response ahead of tax relief and improved access to capital.
For owners who have already sacrificed compensation, the absence of employer-sponsored healthcare can create difficult tradeoffs. Medical expenses must either be paid from personal savings that may already be depleted or postponed altogether, potentially worsening both financial and physical well-being.
Despite these pressures, optimism about entrepreneurship remains surprisingly strong. Seventy-three percent of survey respondents said they still believe in owning a small business. Among them, 30.8% said they love entrepreneurship and cannot imagine doing anything else, while 42.2% said they still believe in the model but feel exhausted by the demands it places on them.
The results suggest that commitment to entrepreneurship remains high even as the financial realities become increasingly difficult.
Key Economic Indicators to Watch for Future Small Business Payroll Stress
Gusto SMB Payroll Stress Index
Gusto’s ongoing payroll-processing data tracks the percentage of small firms that fail to process payroll on time because of insufficient funds. The rate increased from approximately 1.5% in 2019 to 2.3% in 2024.
Future releases will help determine whether payroll stress is stabilizing or continuing to worsen. Additional increases could indicate that owner compensation sacrifices are no longer sufficient to protect employee payrolls.
Intuit QuickBooks Late Payments Report
QuickBooks’ annual report tracks overdue invoices, delinquent receivables, and payment delays. The 2025 edition found that small businesses were owed an average of $17,500 in outstanding invoices, with 47% carrying invoices that were more than 30 days overdue.
The next report will provide an important signal about whether payment delays are becoming more severe, which could directly influence future owner paycheck deferral rates.
Federal Reserve Small Business Credit Survey
The Federal Reserve’s annual SBCS examines financing access, credit applications, and borrowing outcomes for small businesses.
Particular attention should be paid to the percentage of owners using personal funds to support business operations, as well as the share of applicants denied financing or discouraged from applying. Rising figures would reinforce evidence that many owners continue to act as financial backstops for their businesses.
NFIB Small Business Economic Trends Report
NFIB’s monthly report tracks owner sentiment regarding earnings, hiring, compensation, and economic conditions.
One of the most useful indicators is the earnings trends component, which measures whether owners report improving or declining earnings. Historically, sustained negative readings have preceded increases in paycheck-skipping behavior.
Healthcare Policy Changes Affecting Small Business Owners
Because healthcare affordability ranked as the leading burnout concern in Patriot’s survey, legislative developments affecting small business health insurance deserve close attention.
Changes to tax credits, association health plans, public option programs, or other coverage initiatives could materially influence how owners allocate limited cash between personal healthcare and business operations.
Faster Payments and Invoice Collection Reforms
Policymakers and financial institutions are increasingly exploring solutions designed to reduce payment delays.
Some U.S. states have begun discussing mandatory payment terms for small business invoices, similar to policies already adopted in parts of Europe. At the same time, adoption of the Federal Reserve’s FedNow instant-payment infrastructure continues to expand.
Both developments have the potential to reduce the receivables delays that Bluevine identified as a primary driver of owner paycheck deferrals.
Research Shows a Clear Pattern, but Key Questions Remain Unanswered
The Patriot Software survey raises important questions but does not definitively answer them.
Because the survey relied on a self-selected sample of 1,000 owners, managers, and recent former owners recruited through a platform with a commercial interest in the topic, it remains unclear whether the findings perfectly reflect the experiences of all 36 million U.S. small business owners.
It is also difficult to determine whether policy interventions focused on healthcare affordability, invoice payment practices, or access to working-capital credit would reliably reduce paycheck deferrals. Another possibility is that the owners most likely to skip compensation are also the least likely to qualify for or access available support programs.
What is clear is that multiple independent surveys continue to point in the same direction. For many small business owners, skipping a paycheck is not an exceptional event. It has become a recurring financial tool used to keep businesses operating during periods of uncertainty.
Whether that pattern can be meaningfully reduced remains an open question, but the evidence suggests it has become a defining feature of the modern small business landscape.
