Unless we state otherwise or the context otherwise requires, the terms “Paychex,” the “Company,” “we,” “our,” and “us” refer to Paychex, Inc., a Delaware corporation, and its consolidated subsidiaries. Overview We are an industry-leading human capital management (“HCM”) company providing comprehensive technology and advisory solutions in human resources (“HR”), payroll processing, employee benefits, and insurance. As of May 31, 2026, we served approximately 840,000 total customers across the U.S. and parts of Europe, of which approximately 800,000 are payroll clients. Paychex was incorporated in Delaware in 1979, maintains dual corporate headquarters in Rochester, New York and Cincinnati, Ohio, and has a fiscal year that ends on May 31st. Effective human capital management requires significant resources and expertise. Organizations face a rapidly evolving employment landscape including an increasing number and complexity of federal, state, and local regulations; the integration of AI into HCM processes; changing workforce dynamics; increasing medical inflation; and challenges attracting and retaining talent. Changing workplace dynamics include increasingly distributed, mobile workforces as well as employee expectations for user experiences similar to customer-oriented applications. We specialize in helping customers succeed in this rapidly evolving environment. What sets us apart in the industry is our comprehensive suite of solutions, deep advisory expertise, and differentiated access to a large and growing proprietary dataset. Paychex offers a full range of integrated HCM solutions from hire to retire, for businesses and their employees, with configurable options designed to meet a wide range of business sizes and complexities. We believe our solutions address the entire employee life cycle, while also enabling integrations with popular HR, accounting, enterprise resource planning (“ERP”), and point-of-sale applications. Key features of our solutions include: •Comprehensive cloud-based HCM platforms optimized to meet customers' HR and payroll needs; •AI-powered capabilities through WISE, our workforce intelligence engine, which leverages our large proprietary datasets to help automate workflows, enhance decision making, and increase productivity across our solutions and operations; •Expertise in HR and payroll backed by approximately 250 compliance experts and over 650 HR business professionals; •Streamlined workforce management that combines technology with flexible, tech-enabled support options; •Modern, mobile, and intuitive user experience with self-service capabilities; and •Scalable and customizable platforms that provide customers the flexibility to add solutions as they grow. We market our solutions through a combination of direct and virtual sales forces, supported by referrals from channel partners and existing customers, as well as digital lead generation and multi-channel marketing initiatives. Over 60% of our revenue is derived from solutions other than payroll processing. 2 Table of Contents On April 14, 2025, we completed our acquisition of Paycor HCM, Inc. ("Paycor"), a leading provider of HCM, payroll and talent software. This acquisition expanded our presence upmarket, increased cross-sale opportunities, and enhanced our suite of AI-driven HCM solutions. Company Strategy Our strategy is to be the digitally driven HR leader by serving as an essential partner to customers through technology and advisory solutions for HR, payroll, employee benefits, and insurance. We believe that successfully executing this strategy will lead to strong, long-term financial performance. We intend to strengthen and extend our position as a leading provider through continued investments in both our innovative technology and HR advisory solutions. Key elements of our strategy include: •Growing our customer base. We operate in a large and growing market, with significant potential to expand within our current target markets. To support this growth, we invest in demand generation, sales tools, and go-to-market initiatives, including channel partnerships, ecommerce, and digital marketing. We also intend to grow our customer base by expanding sales of solutions beyond our payroll client base and by developing additional standalone offerings that can be sold independently of our core payroll and HCM solutions. •Expanding our share of wallet. We intend to expand our share of wallet by increasing penetration of our HCM software, HR outsourcing, retirement, and insurance offerings, while also broadening the range of solutions we offer to clients. •Driving technology innovation. We continue to invest significantly in our proprietary technology, HCM platforms, advisory solutions and benefits to maximize value for our customers and their employees. We have a robust roadmap focused on enhancing our ability to address the needs of current and prospective customers. We believe we are well positioned to capitalize on AI opportunities through our large and growing data sets, predictive analytics and AI models, and continued investments to increase efficiency, enhance the customer experience, support better outcomes and create growth opportunities. •Pursuing strategic acquisitions. We utilize acquisitions, when appropriate, as a means to expand our portfolio, enter new markets, or increase our scale. We will continue to evaluate potential acquisitions that are aligned with our overall strategy. Our Customers We provide HCM solutions to a diverse customer base operating in a broad range of industries throughout the U.S. and parts of Europe. The flexibility and scalability of our solutions enable our customers to select the best solution that meets their needs. We utilize service agreements and arrangements with customers that generally do not contain specified contract periods and may be terminated by either party with 30-days’ notice. We believe client retention is a useful indicator of client satisfaction with our solutions and support. For the fiscal year ended May 31, 2026 (“fiscal 2026”), our payroll client retention was in the range of 82% to 83% of our beginning client base. Our Solutions We provide a differentiated combination of innovative technology solutions and deep advisory expertise spanning compliance, HR and benefits that help customers more effectively attract, develop, and retain talent in a challenging labor environment. Clients have the option of processing payroll online using our technology, outsourcing to our payroll specialists, or using a combination of these methods. Payroll is integrated with HCM software modules for customers who have more complex HR needs. We continue to invest in our solutions to enhance the customer and employee experiences from hire to retire. We also provide comprehensive HR outsourcing through our administrative services organization (“ASO”) and professional employer organization (“PEO”) solutions. We support approximately 2.6 million worksite employees with our HR Outsourcing Solutions. We have over 650 HR business professionals who are dedicated to our customers and have the experience and training to provide HR best practices and advice. HR business professionals are available to provide our ASO and PEO customers with guidance on HR issues. The integration of leading-edge technology and flexible support options enables us to meet our customers’ needs, from the tactical to the strategic. Building on our advisory strength, we launched WISE, Workforce Intelligence Strengthened by Expertise, our AI-powered intelligence engine that extends our existing capabilities into agentic AI. As of May 31, 2026, WISE powers approximately 600 AI features and agents across our solutions and operations. By embedding agents into the flow of work, WISE moves beyond insight and assistance to autonomous execution for clients. We believe this enables us to scale our expertise, enhance productivity, 3 Table of Contents and deliver better client outcomes, all with human-in-the-loop oversight and strong governance. For more than 50 years, we have been at the center of HR, payroll, and benefits, giving us access to a vast, proprietary, and growing dataset. WISE now draws on more than 26 trillion data points, helping make our solutions smarter, more relevant, and more proactive. We closely monitor the evolving challenges and needs of our customers, and proactively aid our customers in navigating macroeconomic challenges, legislative changes, and other complexities they may face. Over the past year, top challenges for employers were macroeconomic pressures including inflation and interest rates, availability of qualified talent, providing affordable benefits, keeping technology current, and ensuring legal and regulatory compliance. We have approximately 250 compliance professionals who are in real-time contact with tax agencies and regulators to understand upcoming or newly enacted laws and regulations. These compliance experts help ensure that our HCM solutions are updated in a timely fashion to reflect applicable regulations and to support our customers stay in compliance. Management Solutions: We offer a comprehensive portfolio of HCM technology and HR advisory solutions that enable our customers to meet their diverse HR and payroll needs. •HCM technology: We deliver an integrated suite of HCM solutions through three technology platforms that enable seamless workforce management throughout the employee life cycle from recruiting and hiring to retirement. SurePayroll® serves the digitally driven small business self-service market. Paychex Flex® is our proprietary HCM SaaS platform for small and medium-sized businesses. Paycor® is our primary SaaS-based HCM platform for larger businesses with more complex needs. Customers can select the modules they need and configure solutions as they grow including Payroll, HR, Talent Acquisition, Talent Management, Benefits Administration, Workforce Management, and Partner Marketplaces. •Payroll solutions: Serving approximately 800,000 payroll clients, we pay 1 in 11 U.S. private sector workers and moved approximately $1.3 trillion last fiscal year. Our payroll processing solutions include the calculation, preparation, and delivery of employee payroll checks; production of internal accounting records and management reports; preparation of federal, state, and local payroll tax returns; and collection and remittance of clients’ payroll obligations. Our powerful calculation engine enables fast and accurate payroll processing. We provide employers the option of paying their employees by direct deposit, payroll debit card, a check drawn on a Paychex account, or a check drawn on the employer’s account and electronically signed by us, or by ACH. We give employees flexibility to access earned wages before the scheduled pay date. •HR management: A comprehensive suite of HCM tools spanning HR, regulatory compliance, compensation management, employee surveys, expense management, reporting and analytics. Robust workflows and approval capabilities help leaders expedite and automate their most common tasks. Digital communication and engagement solutions help strengthen connections and keep associates engaged. •Talent acquisition: Innovative set of tools designed to streamline and optimize the entire hiring process, from sourcing and attracting candidates to managing the recruiting process. This all-in-one solution empowers HR teams to efficiently manage talent acquisition, improve time-to-hire, and make data-driven decisions to build a high-performing workforce. •Talent management: Powerful tools for managing employee development and retention, spanning performance management, HR compliance, career development, and reporting. We offer businesses the flexibility to capture ongoing performance feedback, recommend and enroll employees in specific training courses, and leverage automated workflows to track progress and approve compensation changes tied to performance. •Workforce management: Comprehensive workforce management solutions designed to optimize labor costs and enhance productivity through integrated time and attendance, scheduling, and labor management tools. Embedded within our core platforms, these capabilities include job costing, labor distribution, expense management and employee self-service tools such as mobile punch-in and shift trading. For enterprise 4 Table of Contents customers, our solution includes automation, analytics, and AI-powered capabilities such as labor forecasting, scheduling recommendations, overtime insights, and timesheet review and approval workflows. •Benefits administration: Software that provides comprehensive benefit administration capabilities for streamlined plan set-up, configuration, and management. It facilitates a simplified and engaging experience for employees during open enrollment and for life event-based changes through intuitive self-service tools. The platform supports a wide array of benefit types, including group health, FSA/HSA, and voluntary benefits, and includes features for compliance management, such as COBRA administration. It features robust reporting and analytics for administrators and ensures data accuracy through seamless direct carrier connectivity, which automates the transfer of enrollment information to benefit carriers. •Partner marketplaces: Perks is a curated digital marketplace for affordable, transferable employee benefits, including early access to earned wages, financial wellness solutions, and voluntary lifestyle benefits. Our Marketplaces provide businesses access to best-in-breed third-party applications and trusted technology partners to seamlessly connect their favorite solutions. •ASO solutions: Our ASO HR outsourcing solutions enable businesses to outsource and simplify HR administration and compliance support. These bundled services combine integrated HCM technology solutions and HR advisory services delivered virtually and on-site by professionally trained HR representatives. Customers can choose from different levels of HR outsourcing, ranging from our low-touch HR support to full-service. We offer these solutions to both payroll and non-payroll customers. •Retirement solutions: We are a leading 401(k) recordkeeper for businesses in the U.S., serving over 130,000 customers and managing $66 billion of retirement assets. Our retirement solutions offer a variety of options to employers, including 401(k) plans, SIMPLE and SEP IRAs, and Pooled Employer Plans, among others. These solutions provide plan implementation, ongoing compliance with government regulations, employee and employer reporting, participant and employer online access, electronic funds transfer, and other administrative services. Customers may choose from a group of pre-defined fund selections or customize their investment options within their plan. Our large-market retirement solutions include relationships with financial advisors. •Funding solutions: We offer various funding solutions. Our wholly owned subsidiary, Paychex Advance, LLC, provides a portfolio of solutions to the temporary staffing industry, including payroll funding (via the purchase of accounts receivable). Alterna Capital Solutions, LLC, offers funding to small businesses through the purchase of outstanding accounts receivable balances under non-recourse agreements. PEO and Insurance Solutions: We provide PEO and insurance solutions designed to help our customers’ manage HR, employee benefits, and business insurance needs. •PEO solutions: Our licensed PEO subsidiaries provide businesses with a comprehensive HR outsourcing solution that includes payroll, HR, employee benefits administration, retirement, insurance, risk management outsourcing, and access to professionally trained HR representatives, both virtually and on-site. PEO solutions differ from our ASO solutions in that we serve as a co-employer of our customers’ employees and assume the risks and rewards of certain workers’ compensation insurance and certain health insurance offerings. We are certified under the Small Business Efficiency Act to provide PEO solutions. Our insurance offerings are designed to help business owners protect their bottom line from unforeseen costs, including cyberattacks and employee lawsuits. •Insurance solutions: Our licensed insurance agency, Paychex Insurance Agency, Inc., provides insurance through a variety of carriers, allowing employers to expand their employee benefit and corporate offerings at an affordable cost. Insurance offerings include property and casualty coverage such as workers’ compensation, business-owner policies, cybersecurity protection, commercial auto, and health and benefits coverage, including health, dental, vision, and life. Our insurance solutions are designed to simplify the insurance process and help customers identify plans with features and pricing that meet their needs. With access to numerous top national and regional insurance carriers, our professional insurance agents have access to a wide selection of plans to best meet the insurance needs of small businesses. Customers can also integrate their insurance plans with Paychex payroll processing for easy, accurate plan administration. 5 Table of Contents Sales and Marketing We market and sell our solutions primarily through our direct sales force based in the markets we serve. Our direct sales force includes field and inside sales representatives who specialize within our portfolio of solutions. Our sales representatives are also supported by marketing, advertising, public relations, and various other demand generation programs. In addition to our direct selling and marketing efforts, we utilize indirect sales channels, including referrals from existing customers, certified public accountants (“CPAs”), benefit brokers, and banks. More than 50% of our payroll clients come from these referral sources. Our dedicated business development group drives sales through banking and broker relationships, national associations, and franchise channels. Complementing our direct sales, our Embedded HCM Solution partnerships efficiently extend our distribution while providing a modern, holistic solution to customers. We also utilize digital marketing to promote our solutions. We have a long-standing partnership with the American Institute of Certified Public Accountants (“AICPA”) as the preferred payroll provider for its AICPA Business Solutions™ Program. Our current partnership agreement with the AICPA is in place through September 2027. We also partner with numerous state CPA society organizations. We provide a free online portal, Paychex Partner Pro, designed to provide accountants quick access to critical data, reporting, and insights for their clients using Paychex Flex. This innovative portal transforms how CPAs manage their portfolios by providing a centralized hub for accessing client payroll and HR data, resolving issues, and identifying missing information, empowering them to operate with greater efficiency and proactivity in serving their clients. We also have long-standing relationships with health insurance and retirement benefits brokers, including large national partners. We recently launched the Partner+ Program to foster broker relationships and drive mutual growth. We now have a broader suite of solutions to offer brokers, which can supplement their offerings to customers, and the Partner+ Program provides a structured framework designed to safeguard mutual customers from competing products. In addition, our Partner Portal provides brokers exclusive access to advanced HCM solutions, new revenue streams, and data-driven insights. Our corporate website is available at www.paychex.com, and is a cost-efficient channel that serves as a source of leads and new sales, while complementing the efforts of our direct, indirect, and virtual sales forces. The website enables us to market to existing and prospective customers who are interested in learning more about our solutions and support across human resources, payroll, benefits, and insurance. Paychex also provides educational resources to customers on regulatory developments, HR topics, and business practices. Paychex WORX and the Paycor HR Center for Excellence provide information on the latest trends, best practices, and industry benchmarks designed to drive business success. We also track current regulatory issues that impact the business community and provide regulatory updates. We issue small business trend reports through our monthly Paychex Small Business Employment Watch. Markets and Competition We remain focused on serving customers based upon the growth potential that we believe exists in the markets we serve. Census data indicates that in the U.S., there are over 6 million employer firms in our target markets. The market for HCM solutions is highly competitive and fragmented. We compete with one primary national competitor as well as other national, international, regional, local, and online payroll providers. In addition to traditional payroll processing and HR solution providers, we compete with in-house payroll and HR systems and departments. We believe our solutions also compete with a variety of providers of HR services, such as retirement solutions companies, insurance companies, HR and benefits consulting firms, and national and regional PEOs. Competition in the HCM industry is primarily based on the breadth of offerings, technology, ease of use, integration with third-party applications, service model, and price. We believe we are competitive in each of these areas. We believe the breadth of our solutions combined with advisory support from industry professionals differentiates our offerings from those of our competitors. 6 Table of Contents Software Maintenance and Development The ever-changing mandates of federal, state, and local tax and regulatory agencies require us to regularly update our proprietary software to provide payroll and HCM solutions to our customers. We are regularly engaged in developing enhancements to and maintaining our various software platforms to meet the changing requirements of our customers and the marketplace. We continue to enhance our AI-driven solutions to offer our users an intelligent, efficient experience. Continued enhancement of the customer and employee experience is important to our future success. Human Capital We believe our ability to attract and retain qualified employees in all areas of our business is critical to our future success and growth. We strive to foster a workplace that promotes belonging and engagement and supports our ability to attract, retain, and develop talented employees while maintaining a safe working environment. We have dedicated resources to ensure that our efforts in building and sustaining a safe and inclusive culture are realized. For detailed information regarding our human capital activities, we encourage investors to visit our Corporate Responsibility website page at https://www.paychex.com/corporate/corporate-responsibility. We have also made our Corporate Responsibility report available on our website. The information contained on our website and in our Corporate Responsibility report is not and should not be viewed as being incorporated by reference into this Form 10-K. Our Employees: As of May 31, 2026, we employed approximately 17,600 people, primarily in the U.S. and on a full-time basis. None of our employees were covered by collective bargaining agreements. We have not experienced a strike or similar work stoppage, and we consider our relations with our employees to be amicable. Paychex Culture: Our cultural values (“Paychex Values”) are designed to guide decision making consistent with the expectations of customers, stockholders, regulators, employees, and communities in which we operate. The Paychex Values are: Integrity Accountability Innovation Partnership Respect Service Each of these values guide our decision-making and is critical to our ongoing success. All employees are required to verify their understanding and observance of these values during our annual “Right Way” training, review these values with management during periodic performance discussions, and are further encouraged to attend ongoing training during the year. Volunteer “Culture Champions” throughout the Company also help promote these values daily. We encourage employee feedback through our employee engagement surveys, as described below. This approach empowers our employees and enables us to make a positive impact in the communities where we work and serve. As a result of our commitment to these principles, in 2026 we were recognized by Ethisphere, a global leader in defining and advancing the standards of ethical business practices, as one of the World’s Most Ethical Companies. This recognition marks the 18th time and 15th consecutive year, that Paychex has been honored since the annual program began in 2007. Talent Acquisition and Development: We compete for talent with our direct competitors and other companies in the geographic areas we serve. We invest significant resources to attract and retain top talent. Our Talent Acquisition team, in conjunction with certain third-party partners, has developed comprehensive processes to identify and recruit accomplished professionals. Comprehensive Compensation and Benefits: We are committed to providing a fair wage and a total rewards package that appropriately incentivizes our employees to achieve their best. We regularly review employee salaries to ensure we are competitive in the industry and offer financial benefits such as a 401(k) plan, employee stock purchase plan, tuition assistance, scholarships for children of employees, and financial education. We are also committed to rewarding employees with a comprehensive, competitive benefits package, which includes medical, prescription, dental, and vision insurance, short- and long-term disability, employee assistance program, paid family leave, and a variety of well-being programs. For fiscal 2026, compensation-related expenses accounted for approximately 52% of our total expenses. Employee Well-being Initiatives: In addition to providing a comprehensive compensation and benefits package, we are committed to providing a safe and healthy workplace for our employees. Healthier employees are at lower risk of injury from workplace related exposures, perform work more safely with lower rates of absenteeism, experience better job performance, and can live their lives more fully outside of work. Our robust well-being program, focuses on the physical, emotional, community, career, and financial health of our employees. 7 Table of Contents Our award-winning well-being initiatives offer a wide variety of services, tools, and resources that can help employees achieve their health goals using a holistic approach. In addition, we sponsor onsite health screenings, Red Cross blood donation events, flu vaccination clinics, vaping and tobacco cessation and weight management programs, meditation and yoga classes, and a variety of other programs. To support our employees’ financial well-being we have developed programs for financial education and support. We maintain procedures for events such as fires, severe weather, medical emergencies, and active shooters, as well as other important information related to general workforce safety. Annually, we celebrate Paychex Culture Day, an additional paid day off for employees to celebrate and recognize a holiday that is significant to them. This is just one of the many ways we celebrate our employees’ unique heritages, and it reflects our Company's commitment to our staff. Employee Engagement: We regularly ask our employees to share their views on working at Paychex through company-wide engagement surveys. Facilitated internally by our Human Resources team, the survey methodology is periodically updated to reflect current trends and issues including company direction and strategy, inclusion, individual development, collaboration, and our Paychex Values. A third-party administers the survey to maintain confidentiality of responses. We use the survey responses to help inform management and assist in developing programs and policies that will maintain and promote Paychex Values. Intellectual Property We own or license and use a number of trademarks, trade names, copyrights, service marks, trade secrets, computer programs and software, and other intellectual property rights. Collectively, our intellectual property rights are material to the conduct of our business. Where it is determined to be appropriate, we take measures to protect our intellectual property rights, including, but not limited to, confidentiality/non-disclosure agreements or policies with employees, vendors, and others; license agreements with licensees and licensors of intellectual property; and registration of certain trademarks. We believe that the “Paychex” name, trademark, and logo are of material importance to us. Seasonality There is no significant seasonality to our business. However, during our third fiscal quarter, which ends in February, the number of new payroll clients, new retirement solutions customers, and new worksite employees associated with our HR Outsourcing businesses tends to be higher than during the rest of the fiscal year, primarily because many businesses prefer to start using our solutions at the beginning of a calendar year. In addition, calendar year-end transaction processing and client funds activity are traditionally higher during our third fiscal quarter due to year-end bonus payments, additional year-end services, and the preparation and delivery of end-of-year reporting requirements. Available Information We are subject to the informational and reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Therefore, we file periodic reports, proxy statements, and other information with the SEC. The SEC maintains a website (www.sec.gov) that includes our reports, proxy statements, and other information. Our corporate website, www.paychex.com, provides materials for investors and information about our solutions. Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and other SEC filings, as well as any amendments to such reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, are made available, free of charge, on our website as soon as reasonably practicable after such reports have been filed with or furnished to the SEC. The information on our website is not incorporated by reference into our Form 10-K. Also, copies of our Annual Report to Stockholders and Proxy Statement, to be issued in connection with our 2026 Annual Meeting of Stockholders, will be made available, free of charge, upon written request submitted to Paychex, Inc., c/o Corporate Secretary, 911 Panorama Trail South, Rochester, New York 14625-2396. 8 Table of Contents