ENTRENAMIENTO CAPACITACIÓN PARA TODOS

PAYCOM PAYROLL HOLDINGS, LLC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2013, 2012 AND 2011 (IN THOUSANDS, EXCEPT PER UNIT AMOUNTS)

The following is a reconciliation of net income (loss) available to Series A Preferred and common unitholders, and the units used in the computation of basic and diluted net earnings (loss) per unit:

Year Ended December 31,

2013 2012 2011

Basic earnings (loss) per unit:

Net income . . . $ 7,711 $ 4,238 $ 1,430 Less: Distribution to Series C Preferred Unitholder . . . (6,467) (4,806) —

Net income (loss) available to Series A Preferred Unitholders

and common unitholders . . . 1,244 (568) 1,430 Weighted-average common units outstanding . . . 955,983 948,181 935,750 Basic earnings (loss) per unit . . . $ 1.30 $ (0.60) $ 1.53 Diluted earnings (loss) per unit:

Net income (loss) available to Series A Preferred Unitholders

and common unitholders . . . $ 1,244 $ (568) $ 1,430 Weighted-average common units outstanding . . . 955,983 948,181 935,750 Dilutive effect of Incentive Units . . . 62,322 56,255 24,861

Total weighted-average common units outstanding,

assuming dilution . . . 1,018,305 1,004,436 960,611 Diluted earnings (loss) per unit . . . $ 1.22 $ (0.57) $ 1.49

Pro forma net income per Share (UNAUDITED)

Pro forma basic and diluted net income per share of common stock (unaudited) has been computed to give effect to the pro forma adjustments discussed below. On January 1, 2014, in anticipation of an IPO, we consummated a reorganization as described under Note 12 (the “2014 Reorganization”). Pro forma basic and diluted net income per share of common stock (unaudited) is not inclusive of all entities as described under Note 12 to be reflected in the 2014 Reorganization as those entities are not reflected in our historical financial statements.

Outstanding common units, Series B Preferred Units, and incentive units of Holdings were converted into 45,708,573 common shares and 8,121,101 restricted shares of common stock of Software at the following conversion rates:

• Outstanding common units, Series B Preferred Units, WCAS Holdings and CP IV Blocker were contributed to Software in exchange for, or converted into, the number of common shares determined by a ratio of common units, Series B Preferred Units and Series A Preferred Units to shares of common stock of approximately 1:47, resulting in issuance of 44,560,053 common shares.

• Vested incentive units were converted to common shares and restricted shares at various conversion ratios, which ranged from approximately 1:0.2 to 1:24. Unvested incentive units were converted to restricted shares at various conversion ratios, which ranged from 1:24 to 1:47. The conversion to common shares versus restricted shares was determined based on the underlying conditions of the pre-conversion incentive units, reflecting any pre-existing vesting conditions. This resulted in issuance of 1,148,520 and 8,121,101 common shares and restricted shares, respectively.

PAYCOM PAYROLL HOLDINGS, LLC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2013, 2012 AND 2011 (IN THOUSANDS, EXCEPT PER UNIT AMOUNTS)

A reconciliation of the numerators and denominators of the pro forma basic and diluted net income per share calculations is as follows (in thousands, except per share amounts):

Pro forma basic net income per share:

Historical net income available to Series A Preferred Unitholders and common

unitholders . . . $ 1,244 Distribution to Series C Preferred Unitholder . . . 6,467 Historical net income . . . $ 7,711 Income tax provision from conversion to a

C-corporation(1) _{. . . . (3,007)}

Interest expense from 14% Note due 2017, net of

tax(2) _{. . . . (3,944)}

Pro forma net income available to common

shareholders . . . $ 760 Pro forma weighted average basic shares

outstanding . . . 47,686,326 Pro forma basic net income per share . . . $ 0.02 Pro forma diluted net income per share:

Pro forma net income available to common

shareholders . . . $ 760 Pro forma weighted average shares outstanding . . . . 47,686,326 Dilutive effect of unvested restricted shares . . . 685,163

Pro forma weighted average diluted shares

outstanding . . . 48,371,489 Pro forma weighted average diluted net income per

share . . . $ 0.02

The pro forma net income applied in computing the unaudited pro forma net income per share for the year ended December 31, 2013 is based upon the Company’s historical net income as adjusted to reflect: (1) Adjustment to income tax expense in connection with the deferred income tax assets and liabilities

recognized, which assumed that Holdings was operating as a C-corporation. The amount was determined using an estimated statutory rate of 39%.

PAYCOM PAYROLL HOLDINGS, LLC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2013, 2012 AND 2011 (IN THOUSANDS, EXCEPT PER UNIT AMOUNTS)

regard to certain future asset distributions, and conversion features. The Board of Directors authorized 700,000 Series A Preferred Units and as of December 31, 2013 and 2012, 671,839 were issued and outstanding.

Series B Preferred Units are non-voting units, of which 270 units were authorized and as of December 31, 2013 and 2012, 270 were issued and outstanding. These Series B Preferred Units are entitled to receive distributions only after certain conditions have been met. As of December 31, 2013, these conditions had not been met.

Common units are voting units with third priority of distribution. The Board of Directors authorized 285,000 common units and as of December 31, 2013 and 2012, 270,750 were issued and outstanding.

Incentive units are non-voting units reserved for issuance to our employees, officers, directors and other service providers. The Board of Directors authorized 50,000 incentive units. Upon consummation of the April 2012 Corporate Reorganization, all four classes of previously issued units of Paycom were exchanged for our units bearing identical terms. We authorized an additional 24,381 incentive units for the purpose of converting previously issued units.

In connection with the April 2012 Corporate Reorganization, Series C Preferred Units with a face value of $46,193 were issued to one of our members, and 50,000 Series C Preferred Units were authorized and 46,193 Series C Preferred Units were issued. Subsequent to the April 2012 Corporate Reorganization, the Series C Preferred Units holder has first priority to distribution and is entitled to a cumulative preferred yield of 14%. The distributions are paid semi-annually in cash and there were no distributions in arrears as of December 31, 2013 and 2012. These Series C Preferred Units are redeemable upon a deemed liquidation event, and the Series C Preferred Units holder has the ability to cause such liquidation event. Upon such deemed liquidation event, all equity holders are entitled to the same form of consideration. Upon our completion of a qualified initial public offering, the Series C Preferred Unitholders’ ability to cause a liquidation event would be eliminated.

Upon liquidation and following the distribution of the Series C Preferred Units liquidation preference of $46,193 plus any accrued but unpaid dividends, any remaining proceeds would be distributed to the holders of the Series A Preferred Units and common units on a pro rata basis. Series B Preferred Unitholders are entitled to receive distribution only after certain conditions are met.

Employee Incentive Units 2009 Incentive Units

We authorized 50,000 2009 Incentive Units (“2009 Incentive Units”) as part of the 2009 Incentive Units Plan (“2009 Plan”). We may award 2009 Incentive Units under the 2009 Plan to certain officers and employees of Paycom at the discretion of the compensation committee. The units vest 50% on the third annual anniversary of the date of issuance and 50% on the fourth annual anniversary of the date of issuance, provided there is no “Company Sale”. “Company Sale” is defined as (i) a transaction or series of

transactions (including by way of merger, consolidation, or sale of the equity) the result of which is that the holders of the units immediately prior to such transaction(s), do not, after giving effect to such

transaction(s), own directly or indirectly through one or more intermediaries, at least 50% of the units, (ii) a sale, transfer, conveyance or other disposition, in one or a series of related transaction, of all or substantially all of our assets determined on a consolidated basis, or (iii) the initial sale, in an underwritten public offering registered under the Securities Act of 1933, as amended, or our (or a successor corporation’s) equity

PAYCOM PAYROLL HOLDINGS, LLC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2013, 2012 AND 2011 (IN THOUSANDS, EXCEPT PER UNIT AMOUNTS)

common units. In addition, all unvested units terminate upon the employee’s termination with us. We have the right, but not the obligation, to repurchase all or any portion of vested units upon termination. We authorized 24,381 units for purposes of converting previously issued units of Paycom into equivalent units of our company as previously discussed.

2012 Management Incentive Units

In connection with April 2012 Corporate Reorganization, we authorized 107,441 Management Incentive Units (“Management Incentive Units”), of which 25,953 and 57,057 were awarded to certain officers and employees of Paycom at the discretion of the Compensation Committee during the years ended

December 31, 2013 and 2012, respectively. Vesting of the 2012 Management Incentive Units pool is 50% time based over five years and 50% market based. The market based vesting is based on a cash return on investment of our majority unitholder with a linear vesting scale. Vesting percentages range from 0% up to 2.0 times return on investment from grant value, up to 100% vesting at 3.5 times return on investment from grant value.

2012 CEO Incentive Units

In connection with April 2012 Corporate Reorganization, we authorized and issued 126,067 of CEO Incentive Units (“CEO Incentive Units”) during the year ended December 31, 2012. Vesting of the CEO Incentive Units is 25% time based over five years and 75% market based. The market based vesting is based on a cash return on investment of our majority unitholder with a linear vesting scale. Vesting percentage ranges from 0% up to 1.5 times return on investment from grant value, up to 100% vesting at 2.5 times return on investment from grant value.

We estimate the fair value of grants of all incentive units using a Monte Carlo simulation model. The model requires various assumptions as inputs, including expected life, volatility, risk free rate (based on U.S. Treasury rates as of the grant date), and no expected dividends. Annual volatility was estimated using the historical volatility of comparable guideline companies. We are required to estimate forfeitures and only record compensation costs for those awards that are expected to vest.

The following table presents a summary of the grant-date fair values of incentive units granted and the related assumptions:

Year Ended December 31,

2013 2012 2011

Grant-date fair value

PAYCOM PAYROLL HOLDINGS, LLC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2013, 2012 AND 2011 (IN THOUSANDS, EXCEPT PER UNIT AMOUNTS)

The following table sets forth the compensation resulting from employee incentive unit arrangements for the years ended December 31, 2013, 2012 and 2011:

Year Ended December 31,

2013 2012 2011

Operating expenses . . . $222 $ 87 $ 36 Sales and marketing . . . 114 83 57 Research and development . . . 345 100 25 General and administrative . . . 253 233 47

$934 $503 $165

The capitalized non-cash incentive compensation expense related to software developed for internal use of $230 and $64 was included in software and capitalized software costs in property, plant and equipment, net in our consolidated balance sheets as of December 31, 2013 and 2012, respectively.

A summary of the status of our non-vested incentive units as of December 31, 2013 and 2012, and related changes during the years ended December 31, 2013, 2012 and 2011 are presented below:

2009 Incentive Units 2013 2012 2011 Nonvested Units Weighted Average Grant-Date Fair Value Nonvested Units Weighted Average Grant-Date Fair Value Nonvested Units Weighted Average Grant-Date Fair Value Beginning of period . . . 13,050 $38.35 25,631 $35.74 22,843 $33.14 Awards . . . — — — — 3,875 $51.16 Modifications . . . — — 3,405 $71.78 — — Forfeitures . . . (128) $47.34 (5,716) $33.74 (1,087) $36.19 Vesting . . . (7,981) $33.22 (10,270) $45.48 — — End of period . . . 4,941 $46.40 13,050 $38.35 25,631 $35.74

2012 Incentive Units (including CEO)

2013 2012 Nonvested Units Weighted Average Grant-Date Fair Value Nonvested Units Weighted Average Grant-Date Fair Value Beginning of year . . . 179,224 $ 8.53 — — Awards . . . 25,953 $14.96 183,124 $ 8.59 Forfeitures . . . (1,275) $14.17 (3,900) $11.16 Vesting . . . (11,564) $ 9.47 — — End of year . . . 192,338 $ 9.31 179,224 $ 8.53

Our incentive units do not have an exercise price and therefore the intrinsic value of the units equal the fair value.

During the year ended December 31, 2013, we redeemed some of our incentive units through total cash payments of $1,061, resulting in total incremental compensation cost of $796, of which $212 has been capitalized on the date of redemptions.

PAYCOM PAYROLL HOLDINGS, LLC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2013, 2012 AND 2011 (IN THOUSANDS, EXCEPT PER UNIT AMOUNTS)

During the year ended December 31, 2012, there was one modification that affected two employees. The modification amended the vesting period from the original 50% on the third and 50% on the fourth anniversaries, to immediate vesting of 100% of the units. This modification resulted in total incremental compensation costs of $129 for the year ended December 31, 2012. There were no modifications to the incentive units during the years ended December 31, 2013 or 2011.

As of December 31, 2013 and 2012, there was $1,272 and $1,338 of total unrecognized compensation costs related to nonvested incentive units issued to employees, respectively. The unrecognized compensation cost is expected to be recognized over a weighted average of 3.7 years. The fair market value of the incentive unit awards shown in the preceding table are based on our estimated enterprise value at the date of grant, with consideration given to rights and terms of such units relative to other classes of units as appropriate. There were also no units converted during the years ended December 31, 2013, 2012 and 2011.