Paychex (PAYX) 10-K risk factor changes: FY2023 vs FY2022

We may not be able to keep pace with changes in technology or provide timely enhancements to our [removed: products] [added: solutions] and [removed: services.][added: support.]

The market for our [removed: products] [added: solutions] is characterized by rapid technological advancements, changes in customer requirements, frequent new product introductions and enhancements, and changing industry standards.

Our future success will depend on our ability to: enhance our current [removed: products] [added: solutions] and introduce new [removed: products] [added: solutions] in order to keep pace with [removed: products] [added: solutions] offered by our [removed: competitors;] [added: competitors, including the successful utilization of artificial intelligence and machine learning solutions;] enhance capabilities and increase the performance of our internal systems, particularly our systems that meet our clients’ requirements; and adapt to technological advancements and changing industry standards.

Our [removed: products] [added: solutions] rely on software and computing systems that can encounter development delays, and the underlying software may contain undetected errors, viruses or defects.

Defects in our [removed: products] [added: solutions] and errors or delays caused by our [removed: products] [added: solutions] could result in additional development costs, diversion of technical and other resources from our other development efforts, loss of credibility with current or potential clients, harm to our reputation and exposure to liability.

Data Security and Privacy Leaks: We collect, use, and retain increasingly large amounts of personal information about our clients, employees of our clients, and our employees, including: bank account, credit card, and social security numbers, tax return [added: information, health care information, retirement account information, payroll information, system and network passwords, and other sensitive personal and business information.]

Furthermore, if any of our [removed: products] [added: solutions] contains a software vulnerability, the vulnerability may be exploited to obtain access to our data or our clients’ data.

While we have security systems and IT infrastructure in place designed to detect and protect against unauthorized access to such information, if our security measures are breached, [added: either internally or externally,] our business could be substantially harmed, and we could incur significant liabilities.

Hardware, [removed: applications] [added: applications,] and services, including cloud-based services, that we develop or procure from third-party vendors may contain defects in design or other problems that could compromise the integrity and availability of our services.

The speed to closure of significant [removed: cyber security] [added: cybersecurity] incidents may be influenced by the cooperation of governmental or law enforcement agencies.

Our business continuity plan has been tested in the past by circumstances of severe weather, including hurricanes, floods, snowstorms, and [removed: rain storms] [added: rainstorms] and has been successful.

[removed: These service] [added: Service] providers include, but are not limited to, couriers used to deliver client payroll checks, banks used to electronically transfer funds from clients to their employees, and information technology vendors servicing cloud-based [removed: platforms we use.][added: platforms.]

State and federal positions regarding co-employment relationships are in a constant state of flux and [removed: changed] [added: change] with varying degrees of impact on our operations.

Successful integration involves many challenges, including the difficulty of developing and marketing new [removed: products] [added: solutions] and [removed: services,] [added: support,] our exposure to unforeseen liabilities of acquired companies, and the loss of key employees of an acquired business.

The Note Purchase and Guarantee Agreement (the “Agreement”) that we entered into in January 2019 in connection with our acquisition of Oasis Outsourcing Group Holdings, [removed: L.P. (“Oasis”),] [added: L.P.,] contains covenants which may restrict our flexibility to operate our business.

Our services are subject to various laws and regulations, including, but not limited to, the [removed: ACA] [added: SECURE Act 2.0, data privacy regulations,] and anti-money laundering rules.

The growth of our international operations [removed: via acquisition] also subjects us to additional risks, such as compliance with foreign laws and regulations.

[removed: As a U.S. company, we] [added: We] are required to comply with [added: regulations administered by multi-national bodies and governmental agencies worldwide including, but not limited to,] the economic sanctions and embargo programs administered by the Office of Foreign Assets Control [removed: (“OFAC”) and similar multi-national bodies and governmental agencies worldwide,] [added: (“OFAC”),] and the Foreign Corrupt Practices Act (“FCPA”).

OFAC places restrictions on the sale or export of certain products and services to certain countries and [removed: persons, including most recently to Russia, Belarus, and portions of Ukraine.][added: persons.]

Our [removed: services] [added: solutions] require the storage and transmission of proprietary and confidential information of our clients and their employees, including personal or identifying information, as well as [removed: their financial] [added: geolocation] and [removed: payroll] [added: biometric] data.

Our [removed: applications] [added: solutions] are subject to various complex government laws and regulations on the federal, state, and local levels, including those governing personal [removed: privacy.][added: privacy, as well as ethical considerations.]

[added: In] the [added: U.S., we are subject to rules and regulations promulgated under the authority of the Federal Trade Commission, the] Health Insurance Portability and Accountability Act of 1996, the Family Medical Leave Act of 1993, the ACA, federal and state labor and employment laws, and state data breach notification and data privacy laws, such as the California Consumer [removed: Protection Act.][added: Privacy Act, as amended.]

[removed: In the] [added: Our] European [removed: Union, we] [added: operations] are subject to the European Union’s General Data Privacy Regulation.

We could be subject to litigation or reputational risk if we or our third-party providers fail to utilize data practices sufficient to safeguard proprietary, confidential, [removed: or] [added: and] personal or identifying information.

[removed: The regulatory] framework for privacy issues is rapidly evolving and future enactment of more restrictive laws, rules, or regulations and/or future enforcement actions or investigations could have a materially adverse impact on us through increased costs or restrictions on our business and noncompliance could result in regulatory penalties and significant legal liability.

Competitors may also misappropriate our trademarks, copyrights or other intellectual property rights or duplicate our technology and [removed: products.][added: solutions.]

Our business, results of operations, and financial condition may [removed: continue to] be impacted by [removed: COVID-19 and other] macroeconomic [removed: events] [added: and/or political factors of the U.S.] and [added: global economy and] such impact could be materially adverse.

[removed: Our] [added: Additionally, our] business is substantially dependent on our clients’ continued use of our solutions and [removed: services,] [added: support,] and our results of operations will decline if our clients are no longer willing or able to use them.

If under financial pressure, our clients may determine that they are no longer willing to pay for the [removed: services and] solutions [added: and support] we provide, which would reduce our revenue.

Because of spending constraints on our clients and competition in the industry, we may face pricing pressure on our services and [removed: face] challenges in onboarding new clients, which would reduce revenue and ultimately impact our results of operations.

In the event we receive negative publicity, our reputation and the value of our brand could be harmed, and clients may not use our [removed: products] [added: solutions] and [removed: services,] [added: support,] which may have a material adverse effect on our business.

Disclosure of our corporate governance practices including our [removed: environmental, social and governance (“ESG”)] [added: ESG] initiatives, may draw negative publicity from stakeholders.

Certain solutions are enhanced with the use of artificial intelligence and machine learning.

The regulatory

We and our clients are subject to the impacts related to inflationary pressure, the recent instability of the banking environment, and other macroeconomic and/or political events.

Banking volatility may subject us and our clients to losses on uninsured funds and may make equity or debt financing more difficult to obtain, and additional equity or debt financing might not be available on reasonable terms, if at all.

Additionally, instability in the banking environment may adversely affect our business.

[Table of Contents](#tableofcontents)

information, health care information, retirement account information, payroll information, system and network passwords, and other sensitive personal and business information.

In addition, there has been and may continue to be a significant number of new laws and regulations promulgated by federal, state, local, and foreign governments following the outbreak of the COVID-19 pandemic.

We have expended additional resources and incurred additional costs in addressing regulatory requirements applicable to us and our clients.

These regulations may be unclear, difficult to interpret or in conflict with other applicable regulations.

Failure to comply with laws and regulations could result in the imposition of consent orders or civil and criminal penalties, including fines, which could damage our reputation and have an adverse effect on our results of operations or financial condition.

In the U.S., we are subject to rules and regulations promulgated under the authority of the Federal Trade Commission,

The global spread of COVID-19 created significant volatility, uncertainty and economic disruption.

The restrictions imposed to prevent the spread of COVID-19 disrupted economic activity, resulting in reduced commercial and consumer confidence and spending, increased unemployment, closure or restricted operating conditions for businesses, volatility in the global capital markets, instability in the credit and financial markets, labor shortages, regulatory relief for impacted consumers, disruption in supply chains, and restrictions on many hospitality and travel industry operations.

Inflationary pressure, caused in part by the pandemic, is ongoing and may be compounded by the Russian invasion of Ukraine and the resulting impact on commodity prices and supply chains.

We are subject to the impacts related to the COVID-19 pandemic and inflationary pressure for so long as our clients are exposed to those heightened risks and uncertainties.

We are a leading [added: provider of] human capital management (“HCM”) [removed: software and services company, offering integrated] solutions for human resources (“HR”), payroll, benefits, and insurance [removed: services] for small- to medium-sized [removed: businesses.][added: businesses and their employees across the U.S. and parts of Europe.]

We offer a comprehensive portfolio of [added: HCM] technology [removed: solutions] and [removed: services, supported by] HR [removed: and compliance expertise,] [added: advisory solutions] that help our clients [removed: address] [added: navigate] the evolving challenges of HR.

Paychex [added: was] incorporated in Delaware in 1979 and has a fiscal year that ends May 31st.

As of May 31, [removed: 2022,] [added: 2023,] we served [removed: greater than 730,000] [added: approximately 740,000] payroll and PEO clients.

We [removed: focus on] [added: specialize in] helping small- to medium-sized businesses who do not have the resources or expertise to adapt to the constantly evolving environment.

Paychex offers a wide range of solutions – including [removed: fully outsourced HR,] [added: HR outsourcing,] HCM [removed: software,] [added: technology,] payroll processing, retirement and insurance solutions – allowing us to customize our offering to the client's business, whether it is small or large, [removed: simple,] [added: simple] or complex.

We provide leading-edge HCM [removed: technology solutions,] [added: technology,] coupled with human expertise, to make complex HR, payroll, and benefits issues simple for our clients.

Streamlined workforce management that combines technology with flexible [removed: service] [added: support] options;

Expertise in HR and payroll with our technology backed by over [removed: 200] [added: 250] compliance experts and [removed: more than] [added: approximately] 700 HR business professionals.

Our [removed: mission] [added: strategy] is to be the leading provider of HCM solutions for HR, payroll, benefits, and insurance by being an essential partner to small- and medium-sized [removed: businesses across the U.S. and parts of Europe.][added: businesses.]

We believe that [removed: success in] [added: successfully executing] this [removed: mission] [added: 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 [added: innovative] technology and [removed: service offerings.][added: HR advisory solutions.]

Providing industry-leading, integrated technology. We continue to invest significantly in our [added: proprietary,] award-winning Paychex Flex® platform and mobility applications to [removed: increase] [added: maximize] efficiency and functionality for our clients and their employees.

[removed: Increasing] [added: Delivering superior] client [removed: satisfaction.] [added: experiences.] Our flexible and technology-enabled service model allows us to provide a personalized experience for our clients and their employees.

We continue to invest in artificial intelligence [removed: and machine learning] [added: ("AI")] and self-service capabilities to allow clients and their employees easy, intuitive, and flexible service how, when, and where they want it.

Our solutions include industry leading HR technology [removed: for managing client's workforce along] with comprehensive HR outsourcing delivered by [removed: over] [added: approximately] 700 HR business professionals.

Our unique combination of industry leading HR [removed: Technology serviced by trained] [added: technology and] HR [removed: business professionals] [added: advisory solutions] sets us apart in the industry.

Growing our client base. We believe we operate in a significantly under-penetrated and growing market, with [removed: significant] [added: untapped] potential to expand within our current target markets.

We have [removed: invested significantly] [added: made substantial investments] in new demand generation and sales tools and expanding certain areas of our sales force.

We continue to focus on sales productivity with the intent of [removed: expanding] [added: increasing] our market share across all our [removed: product lines.][added: solutions.]

Engaging in strategic acquisitions. [removed: In the past, we utilized acquisitions] [added: We utilize acquisitions, when appropriate,] as a means to expand our portfolio, enter new markets or increase our scale.

We [added: will] continue to evaluate and monitor potential acquisitions and [removed: will utilize this when the acquisition targets] [added: target acquisitions that] are in alignment with our overall strategy.

Our solutions bring together payroll and HCM software with HR and compliance expertise, along with flexible, personalized, and technology-enabled [removed: service] [added: support] capabilities.

Clients have the option of doing payroll online using our SaaS technology, outsourcing to our payroll specialists, or using a combination of [removed: those solutions.][added: these methods.]

Payroll is [removed: then] integrated with HCM software modules for clients who have more complex HR needs.

The integration of leading-edge technology and flexible [removed: service] [added: support] options allows us to meet our clients’ needs how, when, and where they want.

[added: HCM Technology:] Paychex Flex [removed: helps clients manage] [added: is our proprietary HCM SaaS platform that provides seamless workforce management throughout] the employee life cycle from recruiting and hiring to [removed: retirement, providing] [added: retirement through] an integrated suite of solutions including recruiting, onboarding, HR, time and attendance and [added: employee benefits.]

Clients can select the modules they need and easily [removed: add on services] [added: customize solutions] as they grow.

Paychex Flex uses a device-independent design throughout [removed: our] [added: the] HCM suite, which allows full functionality of all application components, regardless of device or screen size.

We believe our Paychex mobile [removed: applications] [added: solutions] add greater value and convenience for our clients and their employees by allowing them instant access on their mobile device, and we have experienced strong growth in mobile and self-service usage over the past year.

We have [removed: over] [added: approximately] 700 HR business professionals who are dedicated to our clients and have the experience and training to provide HR best practices and advice.

In addition, we have over [removed: 200] [added: 250] compliance professionals who are in real-time contact with tax agencies and regulators to understand upcoming or newly enacted laws and regulations and advocate for our clients’ interests.

Within Paychex [removed: Flex there is] [added: Flex, we leverage] embedded [removed: technology] [added: AI] to assist [added: our] clients.

The Paychex Flex Intelligence Engine [added: also] includes the Flex Assistant, a customer service chatbot that can answer [removed: approximately 680 commonly asked] questions [added: across thousands of topics] and [removed: offer] [added: provides] access to over 1,200 instructional resources.

Our Paychex Flex Intelligence Engine allows [removed: clients to elect their] [added: individual] preference [removed: for] [added: on] learning [removed: –] [added: style -] via written how-to-documents, tutorial-style video vignettes, or a guided interactive tour.

At any time, a live Paychex agent is just a click away, with the entire chat conversation available [added: in] real-time to provide a [removed: better,] more personalized service experience.

The flexibility and scalability of our solutions allow our clients to [removed: define] [added: select] the [added: best] solution that [removed: best] meets their [removed: needs and to grow within the Paychex Flex platform.][added: needs.]

We simplify their payroll with a combination of our solutions and customer [removed: service] [added: support] options for a quick and easy payday.

Clients may choose to have our service team handle everything for them, or process payroll themselves utilizing our proprietary, robust SaaS Paychex Flex platform and our SurePayroll® SaaS-based [removed: products.][added: solutions.]

Both [removed: products] [added: solutions] allow users to process payroll when they want, how they want, and on any device (desktop, tablet, and mobile phone).

We closely monitor the evolving challenges and needs of small- and medium-sized businesses, and proactively aid our clients in navigating macroeconomic challenges, legislative changes, and other complexities they face.

In the fiscal year ended May 31, 2023 (“fiscal 2023”), top challenges for employers were macroeconomic pressures including inflation and interest rates, maintaining sufficient staffing levels, providing appropriate employee development, keeping technology current, and ensuring legal and regulatory compliance.

We provide a unique blend of innovative technology solutions, backed by our extensive compliance and HR expertise, that help customers more effectively hire, engage, train, and retain top talent in this challenging workforce environment.

As businesses operate in a tight labor market, having an online portal for employee self-service that is intuitive and easy-to-use helps increase employee retention and efficiency for our customers.

We continue to invest in our technology, enhancing our solutions to continuously improve the customer and employee experiences from hiring and onboarding through employee retention.

The Flex Assistant consistently handles nearly two-thirds of questions that would otherwise reach a payroll/HR functionary or a customer service representative, with high satisfaction scores.

We believe client retention is a useful indicator of client satisfaction with our solutions and support.

For fiscal 2023, client retention was in the range of 82% to 83% of our beginning client base.

Paychex Flex HR Connect

In fiscal 2023, we were a signatory to the CEO Action for Diversity & Inclusion pledge, the single largest business-led initiative to advance DE&I in the workplace.

We also created a new DE&I leadership position to ensure that our efforts in building and sustaining a diverse culture of inclusion are realized.

In addition, we were also recognized by Forbes as a Best Employer for Diversity for 2023.

Paychex ranked number five on the prestigious list for the second year.

This is also the Company's 22nd consecutive appearance on the list that identifies organizations that excel at training and employee development.

Our purpose is to allow our customers the freedom to succeed.

The workplace is evolving, and we lead the way by making complex HR, payroll, and benefits simple for our clients.

We focus on providing an industry-leading client experience.

[Table of Contents](#tableofcontents)

We are the second largest publicly traded provider of PEO services in the U.S.

As the global economy continues to evolve, we remain committed to helping our clients navigate the complexity of macroeconomic challenges, legislative changes, the COVID-19 pandemic, or other factors.

In the fiscal year ended May 31, 2022 (“fiscal 2022”), top challenges for employers were obtaining and retaining talent, ensuring employee welfare, introducing comprehensive and differentiated benefits offerings to meet the needs of a competitive labor market, leveraging technology to drive efficiency and support a distributed workforce, and cash flows.

Product developments in fiscal 2022 designed to meet the evolving needs of employers and employees included:

Paychex Pre-Check, a self-service solution that allows employees to review their paystubs and alert their employer of discrepancies before payday.

This significantly reduces errors, increasing efficiency and employee satisfaction.

Retention Insights, which utilizes predictive analytics to help identify employees that may be more likely to consider leaving.

Paychex Employee Retention Tax Credit (“ERTC”) Service, which helps businesses retroactively identify tax credits, based on wages already paid, and file amended returns to claim the credit.

Talent Dashboard, which brings retention insights, time off balances, and performance ratings together in one place.

This allows employers to compare the performance rating and compensation of each job position to ensure they are rewarding employees appropriately and equitably.

Acquisition of a powerful state-of-the-art benefits administration software to help employers drive efficiencies in managing their employee benefits.

Vaccination Management, utilizing enhanced Document Management features, where employees can confidentially upload proof of vaccination or COVID-19 test results.

Additional tools that aid in talent management, including Total Compensation Summary, Pay Benchmarking, Time Off Management, Financial Wellness, etc.

HCM Technology: Paychex Flex is our proprietary HCM SaaS platform that unites HR, payroll, time and attendance, and benefits processes to maximize efficiency and savings.

employee benefits.

We continue to invest in Paychex Flex, making significant enhancements designed to simplify the complexity of HR.

In fiscal 2022, product development focused on new products geared toward increasing digital transformation and use of technology to deliver efficiency for a distributed workforce.

Our fiscal 2022 product development included enhancements to:

| | | |

| --- | --- | --- |

| | Predictive and other data analytics and live reports | Benefits Administration |

| | Document Management (Vaccination Management) | Talent Management Features |

| | Mobility and self-service tools | Voice recognition |

For fiscal 2022, client retention was at approximately 84% of our beginning client base, remaining near record levels.

Our medium-sized clients generally have more complex payroll and employee benefit needs, though with the environment of increasing regulations, we believe the need for HR outsourcing services has been moving down-market.

Any of our clients on Paychex Flex can opt for the integrated suite of HCM solutions, which allows clients to choose the services and software that will meet the needs of their business.

Paychex Promise, a subscription-based service, offers protection against payroll interruptions and solutions to address routine challenges of running a successful business.

The primary offering is payroll protection, which extends the collection of payroll funds from a client’s bank account by seven days without interruption of service or charges for insufficient funds.

Paychex ranked number five on the list, its highest-ever ranking after 21 consecutive appearances, including a number seven ranking in 2021.

In 2022, Paychex was recognized by the Business Group on Health with the Best Employers: Excellence in Health & Well-being Award for our commitment to advancing employee well-being through comprehensive and innovative benefits offerings.

This marks the ninth time Paychex has earned such recognition from the Business Group on Health.

For the fiscal year ended May 31, [removed: 2022][added: 2023]

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T [removed: (§ 232.405] [added: (§232.405] of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

As of November 30, [removed: 2021,] [added: 2022,] the last business day of the most recently completed second fiscal quarter, shares held by non-affiliates of the registrant had an aggregate market value of [removed: $30,609,113,270] [added: $31,621,134,084] based on the closing price reported for such date on the NASDAQ Global Select Market.

As of June 30, [removed: 2022, 359,906,888] [added: 2023, 360,545,780] shares of the registrant’s common stock, $0.01 par value, were outstanding.

Portions of the registrant’s definitive proxy statement to be issued in connection with its Annual Meeting of Stockholders to be held on or about October [removed: 13, 2022,] [added: 12, 2023,] to the extent not set forth herein, are incorporated by reference into Part III, Items 10 through 14, inclusive.

For the fiscal year ended May 31, [removed: 2022][added: 2023]

| [Item 1A](#riskfactors) | [Risk Factors](#riskfactors) | [removed: 12] [added: 11] | |

| [Item 1B](#unresolvedstaffcomments) | [Unresolved Staff Comments](#unresolvedstaffcomments) | [removed: 18] [added: 16] | |

| [Item 2](#properties) | [Properties](#properties) | [removed: 18] [added: 17] | |

| [Item 3](#legalproceedings) | [Legal Proceedings](#legalproceedings) | [removed: 18] [added: 17] | |

| [Item 4](#minesafetydisclosures) | [Mine Safety Disclosures](#minesafetydisclosures) | [removed: 18] [added: 17] | |

| [Item 5](#marketforcommonequity) | [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity](#marketforcommonequity) [Securities](#marketforcommonequity) | [removed: 19] [added: 18] | |

| [Item 6](#selectedfinancialdata) | [\[Reserved\]](#selectedfinancialdata) | [removed: 21] [added: 19] | |

| [Item 7](#mda) | [Management’s Discussion and Analysis of Financial Condition and Results of Operations](#mda) | [removed: 22] [added: 20] | |

| [Item 7A](#marketrisk) | [Quantitative and Qualitative Disclosures About Market Risk](#marketrisk) | [removed: 36] [added: 33] | |

| [Item 8](#financialstatementsandsupplementarydata) | [Financial Statements and Supplementary Data](#financialstatementsandsupplementarydata) | [removed: 38] [added: 36] | |

| [Item 9](#changesanddisagreements) | [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](#changesanddisagreements) | [removed: 72] [added: 70] | |

| [Item 9A](#controlsandprocedures) | [Controls and Procedures](#controlsandprocedures) | [removed: 72] [added: 70] | |

| [Item 9B](#otherinformation) | [Other Information](#otherinformation) | [removed: 72] [added: 70] | |

| [Item 9C](#disclosureregardingforeignjurisdictions) | [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](#disclosureregardingforeignjurisdictions) | [removed: 72] [added: 70] | |

| [Item 10](#directorsexecutiveofficers) | [Directors, Executive Officers and Corporate Governance](#directorsexecutiveofficers) | [removed: 73] [added: 71] | |

| [Item 11](#executivecompensation) | [Executive Compensation](#executivecompensation) | [removed: 74] [added: 72] | |

| [Item 12](#securityownership) | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](#securityownership) | [removed: 74] [added: 72] | |

| [Item 13](#certainrelationships) | [Certain Relationships and Related Transactions, and Director Independence](#certainrelationships) | [removed: 75] [added: 73] | |

| [Item 14](#principalaccountingfees) | [Principal Accounting Fees and Services](#principalaccountingfees) | [removed: 75] [added: 73] | |

| [Item 15](#exhibitsandfinancialstatementschedules) | [Exhibits and Financial Statement Schedules](#exhibitsandfinancialstatementschedules) | [removed: 76] [added: 74] | |

| [Item 16](#item_16) | [Form 10-K Summary](#item_16) | [removed: 78] [added: 76] | |

| | [Signatures](#signatures) | [removed: 78] [added: 77] | |

Certain written and oral statements made by management of Paychex, Inc. and its wholly owned subsidiaries [removed: (“we,”] [added: (“Paychex,” the “Company,” “we,”] “our,” [removed: “us,” “Paychex,”] or [removed: the “Company”)] [added: “us”)] may constitute “forward-looking statements” within the meaning of the safe harbor provisions of the United States (“U.S.”) Private Securities Litigation Reform Act of 1995.

Forward-looking statements can be identified by such words and phrases as “expect,” “estimate,” “intend,” [removed: “overview,”] [added: “intent,”] “outlook,” [removed: “guidance,” “we look forward to,”] “will,” “would,” [removed: “project,”] “projections,” “strategy,” [added: “mission,”] “anticipate,” “believe,” “could,” “may,” “target,” “potential,” [removed: “strive,” “mission,”] [added: “purpose,” “design,”] and other similar words or phrases.

our ability to keep pace with changes in technology [removed: and to] [added: or] provide timely enhancements to our [removed: products] [added: solutions] and [removed: services;][added: support;]

software defects, undetected errors, [removed: or] [added: and] development delays for our [removed: products;][added: solutions;]

the possibility of cyberattacks, security vulnerabilities [removed: and] [added: or] Internet disruptions, including [removed: breaches of] data security and privacy [removed: leaks,] [added: leaks and] data loss and business interruptions;

the possibility of failure of our [removed: operating facilities, computer systems, or communication systems] [added: business continuity plan] during a catastrophic event;

the possibility that we may be [removed: subject] [added: exposed] to additional risks related to our co-employment relationship with our professional employer organization [removed: (“PEO”);][added: (“PEO”) business;]

the impact of [removed: the COVID-19 pandemic and other] macroeconomic factors on the U.S. and global economy, and in particular on our small- and medium-sized business clients;

changes in the availability [added: and retention] of qualified people; and

Our investor presentation regarding the financial results for the fiscal year ended May 31, [removed: 2022] [added: 2023] is available and accessible on our Paychex Investor Relations [removed: page] [added: portal] at https://investor.paychex.com.

We intend to make future investor presentations available exclusively on our Paychex Investor Relations [removed: page.][added: portal.]

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b).

We owned and leased the following properties as of May 31, [removed: 2022:][added: 2023:]

| Rochester, New York | | | [removed: 1,012,000] [added: 832,000] | |

| Total owned facilities | | | [removed: 1,042,000] [added: 862,000] | |

| Other U.S. locations | | | [removed: 1,307,000] [added: 957,000] | |

| International locations | | | [removed: 146,000] [added: 144,000] | |

| Total leased facilities | | | [removed: 1,543,000] [added: 1,191,000] | |

As of June 30, [removed: 2022,] [added: 2023,] there were [removed: 9,119] [added: 8,698] holders of record of our common stock, which includes registered holders and participants in the Paychex, Inc. Dividend Reinvestment and Stock Purchase Plan.

There were also [removed: 3,503] [added: 3,317] participants in the Paychex, Inc. Qualified Employee Stock Purchase Plan and [removed: 4,182] [added: 4,032] participants in the Paychex, Inc. Employee Stock Ownership Plan.

In [removed: May 2019,] [added: July 2021,] our Board approved a program to repurchase up to $400.0 million of our common stock with authorization that [removed: expired in May 2022 after the Company had repurchased all authorized shares.][added: expires on January 31, 2024.]

The following graph shows a five-year comparison of the total cumulative returns of investing $100 on May 31, [removed: 2017,] [added: 2018,] in Paychex common stock, the S&P 500 Index, and [removed: two] [added: a] Peer Group [removed: Indexes.][added: Index.]

[removed: ][added: ]

| May 31, | | [removed: 2017 | | | |] 2018 | | | | 2019 | | | | 2020 | | | | 2021 | | | | 2022 | | | [added: | 2023 | | |]

The [removed: Governance &] Compensation [added: and Leadership] Committee of our Board annually reviews and approves the selection of Peer Group companies, adjusting the group from year to year based upon our business and changes in the Peer Group companies’ business or the comparability of their metrics.

The Peer Group was [added: not] adjusted for fiscal [removed: 2022.][added: 2023.]

Our [removed: new] Peer Group for fiscal [removed: 2022] [added: 2023] is comprised of the following companies:

| Automatic Data Processing, Inc. (direct competitor) | | [removed: H&R Block,] [added: Global Payments] Inc. |

| Bread Financial Holdings, [removed: Inc.(1)] [added: Inc.] | | [removed: Gartner,] [added: H&R Block,] Inc. |

| [removed: Global Payments] [added: Gartner,] Inc. | | The Western Union Company |

Management’s Discussion and Analysis of Financial Condition and Results of Operations reviews the operating results of Paychex, Inc. and its wholly owned subsidiaries (“Paychex,” the “Company,” “we,” “our,” or “us”) for our fiscal year ended May 31, [removed: 2022] [added: 2023] (“fiscal [removed: 2022”] [added: 2023”] or the “fiscal year”), as compared to our fiscal year ended May 31, [removed: 2021] [added: 2022] (“fiscal [removed: 2021”),] [added: 2022”),] and our financial condition as of May 31, [removed: 2022.][added: 2023.]

A detailed review of our fiscal [removed: 2021] [added: 2022] performance compared to our fiscal year ended May 31, [removed: 2020] [added: 2021] performance and our financial condition as of May 31, [removed: 2021] [added: 2022] is set forth in Part II, Item 7 of our Annual Report on Form 10-K (“Form 10-K”) for fiscal [removed: 2021.][added: 2022.]

We offer a comprehensive portfolio of [added: HCM] technology [removed: solutions] and [removed: services, supported by] HR [removed: and compliance expertise,] [added: advisory solutions] that help our clients address the evolving challenges of HR.

Clients may choose to have our [removed: service] [added: support] team handle everything for them, or process payroll themselves utilizing our proprietary, robust [removed: SaaS] Paychex Flex® [removed: platform] and [removed: our] SurePayroll® SaaS-based [removed: products.][added: solutions.]

Any of our clients on Paychex Flex can opt for the integrated suite of HCM solutions, which allows clients to choose the [removed: services] [added: service] and software [added: solutions] that will meet the needs of their business.

Our portfolio of [removed: HCM] [added: technology, HR advisory,] and employee [removed: benefit-related services] [added: benefits-related solutions] is disaggregated into two categories, (1) Management Solutions and (2) [removed: PEO] [added: professional employer organization (“PEO”)] and Insurance Solutions, as discussed in Part I, Item 1 of this Form 10-K.

We believe that [removed: success in] [added: successfully executing] this [removed: mission] [added: strategy] will lead to strong, long-term financial performance.

Our strategy focuses on providing industry-leading, integrated technology; [removed: increasing client satisfaction;] [added: delivering superior customer experiences;] expanding our leadership in HR; growing our client [removed: base;] [added: bases;] and engaging in strategic acquisitions.

Looking to the future, we believe that investing in our [removed: products,] [added: solutions,] people, and [removed: service] [added: digital] capabilities will position us to capitalize on opportunities for long-term growth.

Our ongoing investments in our platforms have prepared us well for the demands of the current business and regulatory environments, allowing us to adapt while maintaining strong [removed: service] [added: solutions and support] delivery, resulting in high levels of client satisfaction and retention.

Fiscal [removed: 2022] [added: 2023] Business Highlights

Highlights compared to fiscal [removed: 2021] [added: 2022] are as follows:

| In millions, except per share amounts | | [removed: 2022] [added: 2023] | | | | | [removed: 2021] [added: 2022] | | | | | Change(3) | | | |

| [removed: Total] [added: Total] service [removed: revenue] [added: revenue] | | [removed: $] | | [removed: 4,554.0] [added: 4,907.3] | | | [removed: $] | | [removed: 3,997.5] [added: 4,554.0] | | | | [removed: 14] | [added: 3,997.5] | [removed: %] |

| [removed: Total revenue] [added: Total revenue] | | [removed: $] | | [removed: 4,611.7] [added: 5,007.1] | | | [removed: $] | | [removed: 4,056.8] [added: 4,611.7] | | | | [removed: 14] | [added: 4,056.8] | [removed: %] |

| [removed: Operating income] [added: Operating income] | | [removed: $] | | [removed: 1,840.0] [added: 2,033.1] | | | [removed: $] | | [removed: 1,460.7] [added: 1,840.0] | | | | [removed: 26] | [added: 1,460.7] | [removed: %] |

| [removed: Net income] [added: Net income] | | [removed: $] [added: $] | | [removed: 1,392.8] [added: 1,557.3] | | | [removed: $] [added: $] | | [removed: 1,097.5] [added: 1,392.8] | | | [added: $] | [removed: 27] | [added: 1,097.5] | [removed: %] |

| Adjusted net income(1) | | $ | | [removed: 1,367.8] [added: 1,548.4] | | | $ | | [removed: 1,102.4] [added: 1,367.8] | | | | [removed: 24] [added: 13] | | % |

| [removed: Diluted] [added: Diluted] earnings per [removed: share] [added: share] | | [removed: $] [added: $] | | [removed: 3.84] [added: 4.30] | | | [removed: $] [added: $] | | [removed: 3.03] [added: 3.84] | | | [added: $] | [removed: 27] | [added: 3.03] | [removed: %] |

| Adjusted diluted earnings per share(1) | | $ | | [removed: 3.77] [added: 4.27] | | | $ | | [removed: 3.04] [added: 3.77] | | | | [removed: 24] [added: 13] | | % |

| Dividends paid to stockholders(2) | | $ | | [removed: 999.6] [added: 1,175.0] | | | $ | | [removed: 908.7] [added: 999.6] | | | | [removed: 10] [added: 18] | | % |

Dividends paid to stockholders represented approximately [removed: 72%] [added: 75%] of net income for fiscal [removed: 2022] [added: 2023] compared to approximately [removed: 83%] [added: 72%] of net income for fiscal [removed: 2021.][added: 2022.]

The purpose of this program is to manage common stock dilution.

There were no shares repurchased during fiscal 2023 and $327.1 million remains available for share repurchases in total under the program.

| Paychex | | $ | 100.00 | | | $ | 135.05 | | | $ | 117.46 | | | $ | 169.33 | | | $ | 212.24 | | | $ | 184.89 | |

| S&P 500 | | $ | 100.00 | | | $ | 103.77 | | | $ | 117.08 | | | $ | 164.26 | | | $ | 163.75 | | | $ | 168.48 | |

| Peer Group | | $ | 100.00 | | | $ | 117.55 | | | $ | 131.60 | | | $ | 169.26 | | | $ | 158.04 | | | $ | 160.00 | |

We are a leading provider of integrated human capital management (“HCM”) solutions for human resources (“HR”), payroll, benefits, and insurance for small- to medium-sized businesses and their employees across the United States (“U.S.”) and parts of Europe.

We closely monitor the evolving challenges and needs of small- and mid-sized businesses, and proactively aid our clients in navigating these challenges.

Through our unique blend of innovative technology solutions, backed by our extensive compliance and HR expertise, we help clients more effectively hire, engage, train, and retain top talent in this challenging workforce environment.

| Net income | | $ | | 1,557.3 | | | $ | | 1,392.8 | | | | 12 | | % |

Client retention remained high in the range of 82% to 83% of our beginning client base for fiscal 2023, compared to approximately 84% for fiscal 2022.

Our fiscal 2023 technology enhancements to our Paychex Flex platform were designed to improve the client and employee experiences from hiring and onboarding through employee retention.

| Net income | | $ | | 1,557.3 | | | | $ | | 1,392.8 | | | | | 12 | | % |

Increase in the number of clients and clients' employees for HCM and worksite employees for HR Solutions;

Higher revenue per client resulting from pricing realization and product attachment, including increased demand for HR Solutions, retirement, and time and attendance solutions; and

Growth in ancillary services.

Higher average interest rates, and

Realized losses on investment sales as we repositioned a portion of our long-term investment portfolio.

| | | | | | | | | | | | | |

| | | | | | | | | | | | | |

| | | | | | | | | | | | | |

Depreciation and amortization: $176.6 million for fiscal 2023, reflecting a decrease of 8%:

Lower amortization expense on intangible assets which use accelerated amortization methods.

Operating income: Fiscal 2023 operating income was $2.0 billion, an increase of 10% compared to fiscal 2022, as a result of revenue growth outpacing expense increases as previously discussed.

| | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | 2023 | | | | | | 2022 | | | | |

Other income/(expense): Other income/(expense) increased $30.5 million to $15.1 million in fiscal 2023 as a result of higher average interest rates earned on our corporate investments.

| Net income | | $ | | 1,557.3 | | | $ | | 1,392.8 | | | | 12 | | % |

| Diluted earnings per share(4) | | $ | | 4.30 | | | $ | | 3.84 | | | | 12 | | % |

| Net income | | $ | | 1,557.3 | | | $ | | 1,392.8 | | | | 12 | | % |

On February 3, 2023, we and Paychex Advance LLC, a Paychex subsidiary and New York limited liability company, entered into Amendment No. 2 (the “Amendment”) to the $250 million, three-year, unsecured, revolving credit facility established on February 6, 2020 (the “2020 Credit Facility”) for which PNC Bank, N.A. acts as administrative agent.

The Amendment, among other things, extended the maturity date of the 2020 Credit Facility from February 6, 2023 to February 6, 2026 at which time all borrowings thereunder will terminate.

Except for extending the maturity date and making ministerial changes to the 2020 Credit Facility, the Amendment did not change the existing terms of the 2020 Credit Facility.

Subsequent to May 31, 2023, there were no additional overnight borrowings under our PNC and JPM credit facilities.

Change in accrued income taxes as a result of the impacts of higher cumulative quarterly tax payments and higher income tax expense related to higher taxable income and effective tax rates over the prior year.

Increase in the net proceeds from the sales of AFS securities;

Increase in proceeds received from the sales of buildings and furniture and fixtures; and

Decrease in cash payments for the acquisitions of businesses.

Decrease in cash payments for repurchases of common shares.

There were no shares repurchased during fiscal 2023 compared to 1.2 million for $145.2 million during fiscal year 2022; offset by

In July 2021, our Board authorized an additional program allowing us to repurchase up to $400.0 million of our common stock which expires on January 31, 2024.

All shares repurchased during fiscal 2022 were retired and were as follows:

| | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | Fiscal 2022 | | | | | | | | | | | | | | | | | |

| In millions, except per share amount | | Total number of shares purchased | | | | Average price paid per share | | | | | Total dollars | | | | | Approximate dollar value of shares that may yet be purchased under the program | | | |

| First quarter | | | — | | | $ | | — | | | $ | | — | | | $ | | 472.4 | |

| Second quarter | | | — | | | $ | | — | | | | | — | | | $ | | 472.4 | |

| Third quarter | | | — | | | $ | | — | | | | | — | | | $ | | 472.4 | |

| March 1 to March 31, 2022 | | | — | | | $ | | — | | | | | — | | | $ | | 472.4 | |

| April 1 to April 30, 2022 | | | — | | | $ | | — | | | | | — | | | $ | | 472.4 | |

| May 1 to May 31, 2022 | | | 1.2 | | | $ | | 118.82 | | | | | 145.2 | | | $ | | 327.2 | |

| Fiscal year | | | 1.2 | | | $ | | 118.82 | | | $ | | 145.2 | | | | | | |

| Paychex | | $ | 100.00 | | | $ | 114.41 | | | $ | 154.51 | | | $ | 134.38 | | | $ | 193.73 | | | $ | 242.82 | |

| S&P 500 | | $ | 100.00 | | | $ | 114.37 | | | $ | 118.69 | | | $ | 133.90 | | | $ | 187.86 | | | $ | 187.27 | |

| Peer Group - old | | $ | 100.00 | | | $ | 125.66 | | | $ | 146.92 | | | $ | 165.41 | | | $ | 213.24 | | | $ | 198.60 | |

| Peer Group - new | | $ | 100.00 | | | $ | 126.76 | | | $ | 149.01 | | | $ | 166.82 | | | $ | 214.56 | | | $ | 200.32 | |

IHS Market Ltd. and Sabre Corporation were removed and replaced with Gartner, Inc., a company that is aligned with the Paychex business.

Both the old and new peer groups are presented for this year of transition.

(1)

On March 23, 2022, Alliance Data System Corporation rebranded its business to Bread Financial Solutions, Inc.

We are a leading HCM software and services company, offering integrated solutions for HR, payroll, benefits, and insurance services for small- to medium-sized businesses.

Our purpose is to allow our customers the freedom to succeed.

The workplace is evolving, and we lead the way by making complex HR, payroll, and benefits simple for our clients.

We continue to focus on driving growth in the number of clients, revenue per client, total revenue, and profits, while providing industry-leading service and technology solutions to our clients and their employees.

A key component of our service delivery strategy is to be a proactive partner with our clients and to develop and release integrated solutions within Paychex Flex to meet their current and future needs.

Client retention beat our expectations and pre-pandemic levels at approximately 84% of the beginning client base for fiscal 2022, compared to over 85% for fiscal 2021, which was a record.

| $ in billions | | | | | | | | | | | | | | | |

In fiscal 2022, we enhanced our solutions to support businesses as they engage in digital transformation.

We have continued to evolve our products to help business leaders find, hire, and retain employees quickly and effectively with an eye on driving engagement and managing labor costs.

Our fiscal 2022 technology and solution developments provide a unique combination of data, technology, and service designed to meet the evolving needs of employers and employees, and include:

Paychex Pre-Check, a self-service solution that allows employees to review their paystubs and alert their employer of discrepancies before payday.

This significantly reduces errors, increasing efficiency and employee satisfaction.

Retention Insights, which utilizes predictive analytics to help identify employees that may be more likely to consider leaving.

Paychex Employee Retention Tax Credit (“ERTC”) Service, which helps businesses retroactively identify tax credits, based on wages already paid, and file amended returns to claim the credit.

Talent Dashboard, which brings retention insights, time off balances, and performance ratings in one place.

This allows employers to compare the performance rating and compensation of each job position to ensure they are rewarding employees appropriately and equitably.

Acquisition of a powerful state-of-the-art benefits administration software to help employers drive efficiencies in managing their employee benefits.

Vaccination Management, utilizing enhanced Document Management features, where employees can confidentially upload proof of vaccination or COVID-19 test results.

Additional tools that aid in talent management, including Total Compensation Summary, Pay Benchmarking, Time Off Management, Financial Wellness, etc.

The following table shows the executive officers of the Company as of May 31, [removed: 2022,] [added: 2023,] and information regarding their positions and business experience.

| Efrain Rivera | | [removed: 65] [added: 66] | | Mr. Rivera joined Paychex in June 2011 [added: and now serves] as Senior Vice [removed: President,] [added: President and] Chief Financial [removed: Officer, and Treasurer.] [added: Officer.] Prior to joining the Company, Mr. Rivera served as Vice President of Finance and Administration for Houghton College from 2009 to 2011. He previously served for over twenty years with Bausch & Lomb Incorporated, a world leader in the development, manufacture, and marketing of eye health products, most recently as Corporate Vice President and Chief Financial Officer from 2007 to 2009. |

| Mark A. Bottini | | [removed: 61] [added: 62] | | Mr. Bottini joined Paychex in October 2011 as Senior Vice President of Sales. From 2008 to 2011, Mr. Bottini served as Vice President of Sales for Ricoh, North America, a provider of advanced office technology and innovative document imaging products, services, and software. He assumed his most recent position with Ricoh when Ricoh acquired IKON Office Solutions, Inc. During his nearly 20 years with IKON, Mr. Bottini served in a variety of sales leadership and field management roles. |

| Michael E. Gioja | | [removed: 64] [added: 65] | | Mr. Gioja was named Senior Vice President of Information Technology and Product Development in July 2011. Mr. Gioja has been with the Company since November 2008 and previously served as Senior Vice President of Information, Technology, Product Management, and Development and Vice President of Product Management. Previously, he was Chief Information Officer and Executive Vice President of Products and Services for Workstream, Inc., a provider of on-demand enterprise talent management solutions and services. |

| Karen E. Saunders McClendon​ | | [removed: 56] [added: 57] | | Ms. Saunders McClendon joined the Company in April 2021 as Vice President and Chief Human Resources Officer. Prior to joining the Company, she served as Vice President of Human Resources for Comcast Cable from 2013 to 2021. From 2009 to 2013, she served as Vice President of Human Resources for Aramark. |

| Stephanie L. Schaeffer | | [removed: 52] [added: 53] | | Ms. Schaeffer was named Vice President and Chief Legal Officer in January 2006. In 2011, she was appointed Corporate Secretary. She joined Paychex in 2000 as Corporate Counsel and was promoted to Director of Legal Affairs in 2004. In her current role, she is responsible for overseeing all the Company's legal functions, including litigation, corporate governance, and regulatory matters. |

| Robert L. Schrader | | [removed: 50] [added: 51] | | Mr. Schrader was named Vice [removed: President] [added: President, Finance] and [removed: Controller] [added: Investor Relations] in [removed: July 2019.] [added: January 2023.] He joined the Company in December 2014 and previously held roles as [added: Vice President and Controller,] Senior Director of Financial Planning and Analysis and Director of Internal Audit. Prior to joining Paychex, he served as a Chief Financial Officer for Unither Manufacturing, LLC, and held various senior management positions during his ten-year career at Bausch & Lomb, including Vice President of Finance and Controller of Global Quality and Operations. Previously in his career, he held leadership roles with a public accounting firm. |

The additional information required by this item is set forth in the Company’s Definitive Proxy Statement for its [removed: 2022] [added: 2023] Annual Meeting of Stockholders, anticipated to be held on or about October [removed: 13, 2022,] [added: 12, 2023,] in the sections “PROPOSAL 1: ELECTION OF DIRECTORS FOR A ONE-YEAR TERM,” “CORPORATE GOVERNANCE,” and “CODE OF BUSINESS ETHICS AND CONDUCT” and is incorporated herein by reference.

The information required by this item is set forth in the Company’s Definitive Proxy Statement for its [removed: 2022] [added: 2023] Annual Meeting of Stockholders, anticipated to be held on or about October [removed: 13, 2022,] [added: 12, 2023,] in the sections “COMPENSATION DISCUSSION AND ANALYSIS,” “NAMED EXECUTIVE OFFICER COMPENSATION,” “DIRECTOR COMPENSATION FOR THE FISCAL YEAR ENDED MAY 31, [removed: 2022,”] [added: 2023,”] “THE COMPENSATION AND LEADERSHIP COMMITTEE REPORT” and the sub-heading “Compensation and Leadership Committee Interlocks and Insider Participation” within the section “CORPORATE GOVERNANCE” and is incorporated herein by reference.

The information required by this item is set forth below and in the Company’s Definitive Proxy Statement for its [removed: 2022] [added: 2023] Annual Meeting of Stockholders, anticipated to be held on or about October [removed: 13, 2022,] [added: 12, 2023,] under the section “BENEFICIAL OWNERSHIP OF PAYCHEX COMMON STOCK,” and is incorporated herein by reference.

Under the Paychex, Inc. 2002 Stock Incentive Plan, as last amended and restated effective October 15, 2020 (the “2002 Plan”), non-qualified or incentive stock options, restricted stock, restricted stock units, performance shares, and performance stock options have been awarded to [removed: employees and the Board.]

The following table details information on securities authorized for issuance upon the exercise of outstanding options under the Company’s equity compensation plans as of May 31, [removed: 2022:][added: 2023:]

| Equity compensation plans approved by security holders | | | | [removed: 3.7] [added: 3.8] | | | $ | | [removed: 69.46] [added: 72.52] | | | | | [removed: 15.6] [added: 14.2] | |

Includes shares available for future issuance through [added: equity award] grants [removed: of restricted stock units and restricted stock awards] under our 2002 Plan.

The information required by this item is set forth in the Company’s Definitive Proxy Statement for its [removed: 2022] [added: 2023] Annual Meeting of Stockholders, anticipated to be held on or about October [removed: 13, 2022,] [added: 12, 2023,] under the sub-headings “Board Meetings and Committees,” “Policy on Transactions with Related Persons,” and “Transactions with Related Persons” within the section “CORPORATE GOVERNANCE,” and is incorporated herein by reference.

The information required by this item is set forth in the Company’s Definitive Proxy Statement for its [removed: 2022] [added: 2023] Annual Meeting of Stockholders, anticipated to be held on or about October [removed: 13, 2022,] [added: 12, 2023,] under the section “PROPOSAL [removed: 3:] [added: 4:] RATIFICATION OF THE SELECTION OF OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM,” and is incorporated herein by reference.

| 1. | | | Financial Statements See Financial Statements and Supplementary Data Table of Contents at page [removed: 38.] [added: 36.] | | |

| | | | Financial statement schedules required to be filed by Item 8 of this Form 10-K include Schedule II — Valuation and Qualifying Accounts. See Financial Statements and Supplementary Data Table of Contents at page [removed: 38.] [added: 36.] All other schedules are omitted as the required matter is not present, the amounts are not significant, or the information is shown in the financial statements or the notes thereto. | | |

| | | | [removed: (10.20)] [added: (10.23)] | | [removed: [Five-Year] [added: [Amendment No. 2 to] Credit Agreement, dated as of [removed: July 31, 2019,] [added: February 3, 2023,] by and among the Company, the [removed: Parent, and] [added: parent,] the lender parties [removed: hereto,] [added: thereto, PNC Bank, N.A. as administrative agent and others,] incorporated herein by reference from Exhibit 10.1 to the Company’s Form 8-K filed with the Commission on [removed: August 1, 2019.](https://www.sec.gov/Archives/edgar/data/723531/000072353119000036/payx-20190731xex10_1.htm)] [added: February 7, 2023.](https://www.sec.gov/Archives/edgar/data/723531/000095017023001997/payx-ex10_1.htm)] |

| | | | [removed: (10.21)] [added: (10.22)] | | [Three-Year Credit Agreement, dated as of February 6, 2020, by and among Paychex Advance LLC, Paychex Inc., and the lender party thereto, incorporate herein by reference from Exhibit 10.1 to the Company’s Form 8-K filed with the Commission on February 11, 2020.](https://www.sec.gov/Archives/edgar/data/723531/000072353120000005/payx-20200206xex10_1.htm) |

| | | | [removed: (10.22)] [added: (10.24)] | | [Form of Pooled Plan Provider Indemnification Agreement, incorporated herein by reference from Exhibit 10.1 to the Company's Form 8-K filed with the Commission on February 23, 2021.](https://www.sec.gov/Archives/edgar/data/723531/000072353121000006/payx-20210223xex10_1.htm) |

| # | | | [removed: (10.23)] [added: (10.25)] | | [Paychex, Inc. 2002 Stock Incentive Plan (as amended and restated effective October 15, 2020), incorporated herein by reference from Exhibit 10.23 to the Company's Form 10-K filed with the Commission on July 16, 2021.](https://www.sec.gov/Archives/edgar/data/723531/000072353121000035/payx-20210531xex10_23.htm) |

| | | | [removed: (10.24)] [added: (10.20)] | | [2017 Credit Agreement, dated as of September 17, 2021, by and among Paychex of New York, the Company, the lender parties thereto, JPMorgan Chase Bank, N.A., as administrative agent, and others, as amended by Amendment No. 1 as of November 21, 2018, Amendment No. 2 as of July 31, 2019, and Amendment No. 3 as of September 17, [added: 2021, incorporated herein by reference to Exhibit 10.1 to the Company's Form 8-K filed with the Commission on September 20,] 2021.](https://www.sec.gov/Archives/edgar/data/0000723531/000072353121000038/payx-20210917xex10_1.htm) |

| | | | [removed: (10.25)] [added: (10.21)] | | [2019 Credit Agreement, dated as of July 31, 2019, by and among Paychex of New York, the Company, the lender parties thereto, JPMorgan Chase Bank, N.A., as administrative agent, and others, as amended by Amendment No. 1 as of September 17, [added: 2021, incorporated herein by reference to Exhibit 10.2 to the Company's Form 8-K filed with the Commission on September 20,] 2021.](https://www.sec.gov/Archives/edgar/data/0000723531/000072353121000038/payx-20210917xex10_2.htm) |

| * | | | (21.1) | | [Subsidiaries of the [removed: Registrant.](https://www.sec.gov/Archives/edgar/data/723531/000095017022012734/payx-ex21_1.htm)] [added: Registrant.](https://www.sec.gov/Archives/edgar/data/723531/000095017023032988/payx-ex21_1.htm)] |

| * | | | (23.1) | | [Consent of Independent Registered Public Accounting Firm, PricewaterhouseCoopers [removed: LLP.](https://www.sec.gov/Archives/edgar/data/723531/000095017022012734/payx-ex23_1.htm)] [added: LLP.](https://www.sec.gov/Archives/edgar/data/723531/000095017023032988/payx-ex23_1.htm)] |

| * | | | (24.1) | | [Power of [removed: Attorney.](https://www.sec.gov/Archives/edgar/data/723531/000095017022012734/payx-ex24_1.htm)] [added: Attorney.](https://www.sec.gov/Archives/edgar/data/723531/000095017023032988/payx-ex24_1.htm)] |

| * | | | (31.1) | | [Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of [removed: 2002.](https://www.sec.gov/Archives/edgar/data/723531/000095017022012734/payx-ex31_1.htm)] [added: 2002.](https://www.sec.gov/Archives/edgar/data/723531/000095017023032988/payx-ex31_1.htm)] |

| * | | | (31.2) | | [Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of [removed: 2002.](https://www.sec.gov/Archives/edgar/data/723531/000095017022012734/payx-ex31_2.htm)] [added: 2002.](https://www.sec.gov/Archives/edgar/data/723531/000095017023032988/payx-ex31_2.htm)] |

| * | | | (32.1) | | [Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of [removed: 2002.](https://www.sec.gov/Archives/edgar/data/723531/000095017022012734/payx-ex32_1.htm)] [added: 2002.](https://www.sec.gov/Archives/edgar/data/723531/000095017023032988/payx-ex32_1.htm)] |

| * | | | (32.2) | | [Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of [removed: 2002.](https://www.sec.gov/Archives/edgar/data/723531/000095017022012734/payx-ex32_2.htm)] [added: 2002.](https://www.sec.gov/Archives/edgar/data/723531/000095017023032988/payx-ex32_2.htm)] |

| * | Exhibit filed [added: or furnished] with this report. |

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on July [removed: 15, 2022.][added: 14, 2023.]

[removed: By: /s/] Martin [removed: Mucci][added: Mucci*, Director]

[removed: Chairman of the Board of Directors] [added: President] and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated on July [removed: 15, 2022.][added: 14, 2023.]

[added: |] (Principal Executive Officer) [added: | |]

[added: |] /s/ Efrain Rivera [added: | |]

[added: |] Efrain Rivera, Senior Vice [removed: President,] [added: President and] Chief Financial [removed: Officer, and Treasurer][added: Officer | |]

[added: |] (Principal Financial Officer) [added: | |]

| John B. Gibson | | 57 | | Mr. Gibson has served as President and CEO of the Company since October 2022. Prior to serving as President and CEO, Mr. Gibson was promoted to the role of President and Chief Operating Officer in December 2021, leading the daily operations of the company, including sales, service, marketing, and management. Mr. Gibson joined Paychex as Senior Vice President of Service in May 2013, bringing with him more than 20 years of experience in HR solutions, technology, and business services. Prior to Paychex, Mr. Gibson served in senior executive positions at HR outsourcing and technology companies, including Ameritech (now AT&T) and Convergys, where he served as president of the HR management division providing comprehensive global HR solutions to clients in 68 countries. |

| Elizabeth Roaldsen | | 51 | | Ms. Roaldsen joined the Company in May 2023 as Senior Vice President of Operations and Customer Experience. Prior to joining the Company, she served as Managing Director, head of enterprise business services, and wholesale banking at HSBC from 2021 through 2023. Previously, Ms. Roaldsen served in various roles of increasing responsibility at State Street Corporation from 2010 to 2021, most recently as Executive Vice President Head of Global Operations and Asset Servicing. |

employees and the Board.

| | | | (10.26) | | [Amendment No. 1 to Paychex, Inc. 2002 Stock Incentive Plan (as amended and restated effective October 15, 2020), dated July 14, 2022, incorporated herein by reference from Exhibit 10.1 to the Company’s Form 10-Q filed with the Commission on December 22, 2022.](https://www.sec.gov/Archives/edgar/data/723531/000095017022026948/payx-ex10_1.htm) |

| # | | | (10.27) | | [Paychex, Inc. 2002 Stock Incentive Plan (as amended and restated effective October 15, 2020) Amended Form of Restricted Stock Unit Award Agreement (Board), incorporated herein by reference to Exhibit 10.1 to the Company's Form 10-Q filed with the Commission on September 29, 2022.](https://www.sec.gov/Archives/edgar/data/723531/000095017022019048/payx-ex10_1.htm) |

| # | | | (10.28) | | [Paychex, Inc. 2002 Stock Incentive Plan (as amended and restated effective October 15, 2020) Amended Form of Restricted Stock Unit Award Agreement (Officer), incorporated herein by reference to Exhibit 10.2 to the Company's Form 10-Q filed with the Commission on September 29, 2022.](https://www.sec.gov/Archives/edgar/data/723531/000095017022019048/payx-ex10_2.htm) |

| # | | | (10.29) | | [Paychex, Inc. 2002 Stock Incentive Plan (as amended and restated effective October 15, 2020) Amended Form of Restricted Stock Unit Award Agreement (Senior Management), incorporated](https://www.sec.gov/Archives/edgar/data/723531/000095017022019048/payx-ex10_3.htm) |

| | | | | | |

| --- | --- | --- | --- | --- | --- |

| | | | | | [herein by reference to Exhibit 10.3 to the Company's Form 10-Q filed with the Commission on September 29, 2022.](https://www.sec.gov/Archives/edgar/data/723531/000095017022019048/payx-ex10_3.htm) |

| # | | | (10.30) | | [Paychex, Inc. 2002 Stock Incentive Plan (as amended and restated effective October 15, 2020) Amended Form of Restricted Stock Unit Award Agreement (Management), incorporated herein by reference to Exhibit 10.4 to the Company's Form 10-Q filed with the Commission on September 29, 2022.](https://www.sec.gov/Archives/edgar/data/723531/000095017022019048/payx-ex10_4.htm) |

| # | | | (10.31) | | [Paychex, Inc. 2002 Stock Incentive Plan (as amended and restated effective October 15, 2020) Amended Form of Restricted Stock Unit Award Agreement (Special Award), incorporated herein by reference to Exhibit 10.5 to the Company's Form 10-Q filed with the Commission on September 29, 2022.](https://www.sec.gov/Archives/edgar/data/723531/000095017022019048/payx-ex10_5.htm) |

| # | | | (10.32) | | [Paychex, Inc. 2002 Stock Incentive Plan (as amended and restated effective October 15, 2020) Amended Form of 2022-2024 Performance Restricted Stock Unit Award Agreement, incorporated herein by reference to Exhibit 10.6 to the Company's Form 10-Q filed with the Commission on September 29, 2022.](https://www.sec.gov/Archives/edgar/data/723531/000095017022019048/payx-ex10_6.htm) |

| # | | | (10.33) | | [Paychex, Inc. 2002 Stock Incentive Plan (as amended and restated effective October 15, 2020) Amended Form of Non-Qualified Stock Option Award Agreement (Board), incorporated herein by reference to Exhibit 10.7 to the Company's Form 10-Q filed with the Commission on September 29, 2022.](https://www.sec.gov/Archives/edgar/data/723531/000095017022019048/payx-ex10_7.htm) |

| # | | | (10.34) | | [Paychex, Inc. 2002 Stock Incentive Plan (as amended and restated effective October 15, 2020) Amended Form of Non-Qualified Stock Option Award Agreement (Board), incorporated herein by reference to Exhibit 10.8 to the Company's Form 10-Q filed with the Commission on September 29, 2022.](https://www.sec.gov/Archives/edgar/data/723531/000095017022019048/payx-ex10_8.htm) |

| # | | | (10.35) | | [Amendment to Award Agreements of Martin Mucci under the Amended and Restated 2002 Stock Incentive Plan (as amended and restated effective October 15, 2020), dated as of October 14, 2022, incorporated by reference to Exhibit 10.2 to the Company’s Form 10-Q filed with the Commission on December 22, 2022.](https://www.sec.gov/Archives/edgar/data/723531/000095017022026948/payx-ex10_2.htm) |

[Table of Contents](#tableofcontents)

By: /s/ John B.

Gibson

John B.

Gibson

| | |

| --- | --- |

| /s/ John B. Gibson | |

| John B. Gibson, President, Chief Executive Officer, and Director | |

| | |

| --- | --- |

| | |

| --- | --- |

Theresa M.

Payton*, Director

| | |

| --- | --- |

| *By: /s/ John B. Gibson | |

| John B. Gibson, as Attorney-in-Fact | |

| Martin Mucci | | 62 | | Mr. Mucci assumed the role of Chairman of the Board effective December 2021 and continues to serve as Chief Executive Officer of the Company. Mr. Mucci had served as President and CEO of the Company since September 2010. Mr. Mucci joined the Company in 2002 as Senior Vice President, Operations. Prior to joining Paychex, he held senior level positions with Frontier Communications of Rochester, a telecommunications company, including President of Telephone Operations and Chief Executive Officer of Frontier Telephone of Rochester, during his 20-year career. Mr. Mucci serves as a director of NCR Corporation. He is also a member of the Business and Government Software and Services Advisory Team for Madison Dearborn Partners. Mr. Mucci was a director of Cbeyond, Inc. until it was purchased by Birch Communications in July 2014. He is a Trustee Emeritus of St. John Fisher College. He also serves as a director of the Company and is chairman of the Executive Committee. |

| John B. Gibson | | 56 | | Mr. Gibson assumed the role of President and Chief Operating Officer in December 2021. He joined Paychex in May 2013 as Senior Vice President of Service. Prior to joining the Company, Mr. Gibson served as President and Chief Executive Officer for AlphaStaff, a national provider of human resource outsourcing services to small- and medium-sized businesses. Prior to joining AlphaStaff in 2010, Mr. Gibson was President of the HR Management Division of Convergys, a global leader in technology, outsourcing, and business services. From 2004 to 2007, he served as Senior Vice President of Global Operations and Client Services of Convergys. |

Martin Mucci

/s/ Martin Mucci

Martin Mucci, Chairman of the Board of Directors and Chief Executive Officer

Schrader

Robert L.

*By: /s/ Martin Mucci

Martin Mucci, as Attorney-in-Fact