The gain in private sector jobs follows a 281,000 increase in June and is also the strongest increase since November 2012, according to Automatic Data Processing. The increase was also the above the average for the year, which stands at 204,000.
Economists surveyed by Bloomberg had estimated a median 230,000 advance in July, with estimates ranging from 190,000 to 295,000.
Medium-sized businesses made the most gains with 92,000 more jobs. Smaller companies added 84,000 jobs and big businesses had a 41,000 increase in payrolls.
Businesses have been slowing down on layoffs, which has increased job security leading to better consumer confidence and household spending, which accounts for 70 percent of the U.S. economy.
ADP's report comes a day before the Labor Department is expected to release its jobs report for July. While both reports tend to share a common trend, ADP's numbers have differed from the Labor Department's by an average of 37,000 this year.
While ADP records only private sector job increases, the Labor Department's report also accounts for federal, state and local government job additions.