Payslip Statistics Survey Report 2023

PAYSLIP STATISTICS SURVEY REPORT 2023

Compiled and edited by the CIPP policy and research team

Sponsored by

Includes historical data from 2008

Welcome to your new look Payslip Statistics Survey Report .

For 2023, we have updated the style and feel of the report, to ensure we’re communicating crucial information in the most effective way. We hope you enjoy this year’s report.

CONTENTS

Datagraphic foreword

Payslip statistics

17 17 18 20 24

Change of pay frequency

Executive summary

Payroll payments Payslip information

Key findings

Core demographics

Holiday pay

Employees and frequencies Number of employees paid Number of payrolls processed Payroll frequencies operated Popular pay days and dates

New for 2023

10 11 11 12 14 15

Fast-paced change Financial well-being

26 28

Appendices - year-on-year data

Payslip distribution Payroll record keeping

DATAGRAPHIC FOREWORD

Halfway through 2023, each quarter delivers more uncertain market conditions than the last.

The feedback from the report reveals employees still have concerns about low confidence in digitisation, fraud and data security of payroll systems. Expecting teams to adopt any new system assumes users are optimistic about the tool’s benefits. We do a lot when onboarding clients to reassure and nurture how they use our software to achieve maximum benefit. Multichannel communication platforms, such as our Epay service can alleviate doubt and offer a secure platform to distribute epayslips, share information and protect employee privacy. Our clients routinely report that using Epay to distribute online payslips or automate printed formats saves time and money and reduces inbound queries for payroll teams. All in all, the hours saved are invaluable for concentrating on higher-value work. Given we’re in an unpredictable economy, it’s key for organisations to look for straightforward process improvement tools they can quickly deploy without capital costs.

Rising costs, supply chain challenges and greater legislation bring efficiency to the forefront, and payroll is no exception, whether public or private sector. More organisations now have digital tools in place to improve payroll processes and drive greater efficiency, with 28% of those surveyed changing the distribution of payslips since the pandemic. 84% use a self-service platform to offer staff immediate access to payroll information. It’s encouraging to see this shift towards automation, but it simultaneously reveals an opportunity for others to catch up with the digital transformation of payroll operations. After all, printed or digital, the payslip remains a legal obligation for every organisation. However, the data shows that 75% of respondents overlook the convenience of using payslips to communicate other messages. Furthermore, 50% have no tools to help employees better understand their pay. Given the disruptive nature of ad hoc pay-related questions on payroll teams, implementing the appropriate systems could handle many of these queries with minimal disruption.

Glyn King Group managing director, Datagraphic

Datagraphic is proud to support the work of the CIPP and the Payslips Statistics Survey report .

EXECUTIVE SUMMARY

The Payslip Statistics Report is one of the CIPP’s flagship surveys which explores trends impacting payroll processes, payslips and compliance. The research has been conducted on an annual basis since 2008 and continues to confirm and discover practices in payroll. The policy and research team are responsible for collating the research and thank everyone who took the time to respond to the survey. These contributions are vital to ensure the results are representative of the payroll industry.

Each year, topical questions are included in the survey. This year, fast-paced change and the role payroll plays in employee financial well-being have been explored.

For the 2023 report, the policy team performed a data cleanse to align the dates presented in the report. In previous years, the date was represented as a tax year format, i.e., 2012/13, and in others it was represented as the year it was published i.e., 2008.

We are the voice of the CIPP’s members and influence payroll policies, conduct research and provide guidance. We also monitor legislation, engage with our members and produce reports on the shape of the payroll profession. If you would like to speak with us please email policy@cipp.org.uk

For consistency, the dates have been amended to represent the year the data was gathered, rather than the tax year it was obtained in.

For the 2023 report, the data was gathered between February and March 2023, and we received a 71% increase in responses compared to 2022. The policy team are thrilled to see so many payroll professionals involved in this key piece of research.

KEY FINDINGS

99% OPERATING A MONTHLY PAYROLL - THIS REMAINS THE MOST COMMON PAY FREQUENCY

FRIDAY REMAINS THE MOST POPULAR PAY DAY FOR WEEKLY, FORTNIGHTLY AND 4-WEEKLY PAYROLLS

THE LAST WORKING DAY OF THE MONTH REMAINS THE MOST POPULAR MONTHLY PAYROLL PAY DATE

THE NUMBER OF RESPONDENTS WHOSE PAYROLL TEAMS PROCESS 51 – 1,000 EMPLOYEES HAS INCREASED

IMPROVE TEAM EFFICIENCIES / INCREASE RESOURCE CAPACITY

MOST RESPONDENTS USE AN EMPLOYEE SELF- SERVICE PLATFORM TO ENABLE INDIVIDUALS TO ACCESS THEIR PAYSLIPS

13% HAVE IMPLEMENTED A CHANGE OF PAY FREQUENCY. THE TOP TWO REASONS WERE:

MORE THAN HALF OF RESPONDENTS STORE PAYROLL RECORDS FOR SIX YEARS PLUS THE CURRENT TAX YEAR

IMPROVE CASHFLOW

BACS CONTINUES TO DOMINATE PAYROLL PAYMENTS AS MOST POPULAR PAYMENT METHOD 88%

THE MOST POPULAR METHOD TO MAKE AD HOC AND INTERIM PAYMENTS TO EMPLOYEES WAS VIA A MANUAL PAYMENT PROCESS

THE RESULTS HIGHLIGHTED EVIDENCE OF NON-COMPLIANCE WITH HOLIDAY PAY CALCULATIONS, UNDERLINING THE ADMINISTRATIVE CHALLENGE FACED BY PAYROLL TEAMS IN THIS AREA

THE NUMBER OF RESPONDENTS WHO PROCESS ONLY ONE PAYROLL HAS INCREASED

Percentages have been rounded to the nearest whole number for clarity and in some instances may not total 100%

KEY FINDINGS CONT

OF RESPONDENTS ARE ENABLING MORE HYBRID / REMOTE WORKING, ALLOWING EMPLOYEES TO SAVE ON COMMUTING COSTS. 60%

THE TOP THREE

77% OF RESPONDENTS WHO USED HM REVENUE AND CUSTOMS’ (HMRC’S) PAYSLIP MESSAGE REGARDING THE HEALTH AND SOCIAL CARE LEVY DID NOT RECEIVE ANY QUERIES AROUND THE INCREASE TO NATIONAL INSURANCE

PAYROLL QUERIES RELATE TO:

BEING UNABLE TO ACCESS THE ONLINE PAYSLIP

AN UNDERPAYMENT DUE TO LATE DATA SENT TO PAYROLL

QUERYING THE TAX CODE APPLIED

57% OF RESPONDENTS STORE ALL RECORDS DIGITALLY

54% PAYROLL TEAM RESPONDS TO INDIVIDUAL QUERIES RECEIVED

58%

89%

PRINTED PAYSLIPS OVERALL ARE DECREASING IN POPULARITY

THE TOOLS USED BY PAYROLL TEAMS TO HELP EMPLOYEES UNDERSTAND THEIR PAY INCLUDE:

CONFIRMED THAT ALL PAY AND DEDUCTION

WERE FULLY COMPLIANT WITH THE FULL PAYMENT SUBMISSION (FPS) REQUIREMENTS

44% PAYSLIP MESSAGE

ELEMENTS ARE BROKEN DOWN ON THE PAYSLIP

26% SELF-SERVICE PORTAL COMMUNICATION MESSAGES

FOR PAY DAY REPORTING

Percentages have been rounded to the nearest whole number for clarity and in some instances may not total 100%

WHERE IS YOUR BUSINESS BASED?

11% United Kingdom and overseas

CORE DEMOGRAPHICS

5% Scotland

1% Northern Ireland

15% Throughout the UK

4% Wales

64% England

PAYROLL TEAM TYPE

28%

72%

Payroll service provider (outsourced / bureau)

In-house payroll team

Percentages have been rounded to the nearest whole number for clarity and in some instances may not total 100%

BUSINESS SECTORS

0.34%

1.37%

Accountancy

Advertising

Agriculture

Arts

Aviation

0.68%

1.71%

0.34%

1.37%

Brewery / Beverages

Banking

Building

Care facilities

Catering

3.41%

0.68%

0.34%

3.07%

Chemical / Petrochemical

Childcare

Cleaning

Construction

Consultancy

3.07%

0.34%

8.19%

3.41%

Entertainment / Hospitality

Distribution

Domestic services

Education

Engineering

4.78%

1.02%

5.12%

3.41%

2.73%

Housing / Landlords

Financial services

Haulage

Healthcare

Insurance

2.73%

2.05%

1.02%

2.73%

1.71%

Legal

Leisure

Local Government

Logistics

0.34%

12.29%

1.02%

0.34%

Manufacturing

Media

Mining / Quarrying

Ministry of Defence

Offshore e.g. oil

Property e.g. estate agents / developers etc.

Public Sector e.g. Police, Fire, Civil Service etc

2.39%

0.68%

1.02%

2.73%

0.68%

Pharmaceutical

Publishing

Recruitment

0.34%

5.46%

0.34%

0.68%

Religious organisations

Retail

Sales

Security

Shipping / Port

0.34%

2.39%

1.37%

2.39%

5.46%

Other (please specify)

Transport

Utilities

Voluntary / Charity

Telecommunications

Please note: bureau respondants may have selected multiple business sectors

Number of employees paid This key question is asked each year in the Payslip Statistics Survey . Respondents are able to select only one option, therefore, respondents from an outsourced environment would have answered this question with one client in mind, or collectively thinking of all the clients they process payrolls for. VIEW YEAR-ON- YEAR DATA

EMPLOYEES AND FREQUENCIES

Consistently, we see most respondents pay between 51 – 1,000 employees, with many paying between 1,001 – 10,000.

52%

pay 51 – 1,000 employees

37% pay 1,001 – 10,000 employees

7% pay more than 10,000 employees

pay less than 50 employees 4%

Percentages have been rounded to the nearest whole number for clarity and in some instances may not total 100%

Number of payrolls processed

Payroll frequencies operated

VIEW YEAR-ON- YEAR DATA

There have been increases in the number of payrolls processed by respondents, of one payroll, 101 – 500 payroll s and over 1,000 payrolls by 4.94% , 2.52% and 0.77% respectively.

A monthly pay frequency is still the most popular, with almost all respondents operating this frequency in some way. Since last year, there has been a small increase to monthly and 4-weekly / lunar pay of 2.38% and 2.71% respectively. Interestingly, there has been a decrease to fortnightly and weekly pay by 1.51% and 1.68% respectively. With the increased use of pay on demand / earned wage access, which may come with a cost to the employer, it was expected that fortnightly and weekly pay frequencies would have increased.

33%

31%

2-5

99%

6-10

11-20

Monthly

21-50

35%

18% 14%

51-100

Weekly

4-weekly / lunar

Annually

13%

101-500

3% 17% 8%

501-1,000

Bi-annually

Fortnightly

Quarterly

Over 1,000

Percentages have been rounded to the nearest whole number for clarity and in some instances may not total 100%

Popular pay days and dates

Monday, Tuesday, Wednesday and Thursday pay for 4-weekly payroll pay days show an increase of 5.56% , 2.99% , 1.71% and 4.27% respectively. The significant increase to a Monday pay day aligns with the findings from fortnightly pay days. Friday, Saturday and Sunday pay dates show a decrease of 4.49% , 1.71% and 1.5% respectively. However, Friday remains the most popular pay day.

Friday still comes top for weekly payroll pay days but has decreased by 1.59% since 2022 . Tuesday, Wednesday and Thursday pay days have all seen increases by 6.24%, 6.21% and 6.5% respectively.

Monday has seen a significant increase of 7.85% for fortnightly payroll pay days. No fortnightly pay days have been reported as paying on a Saturday or Sunday.

WEEKLY PAYROLL PAY DATES

FORTNIGHTLY PAYROLL PAY DATES

4-WEEKLY PAYROLL PAY DATES

14% Monday

10% Tuesday

13% Monday

13% Tuesday

17% Monday

14% Tuesday

19% Wednesday

13% Wednesday

42% Thursday

87% Friday

25% Thursday

85% Friday

15% Thursday

87% Friday

6% Saturday

4% Saturday

4% Sunday

1% Sunday

VIEW YEAR-ON- YEAR DATA

Percentages have been rounded to the nearest whole number for clarity and in some instances may not total 100%

VIEW YEAR-ON- YEAR DATA

MONTHLY PAYROLL PAY DATES

The last working day of the month remains the most popular monthly payroll pay date, followed closely behind by 25th and 28th of the month. 27th, 22nd and 28th of the month have all seen an increase of 5.5% , 4.95% and 3.47% increase, respectively.

7% 2% 3% 3% 9% 4% 3%

2% 2% 6% 2% 4% 2% 3%

18% 3% 3% 5% 4% 10% 8%

8% 6% 9% 30% 13% 10% 30%

4% 10% 10%

34% Last working day of the month

1% Last Monday of the month

1% Last Tuesday of the month

21% Last Friday of the month

9% Last Thursday of the month

2% Last Wednesday of the month

5% Other

Percentages have been rounded to the nearest whole number for clarity and in some instances may not total 100%

Payslip distribution

VIEW YEAR-ON- YEAR DATA

In the 2022 survey, the question regarding payslip distribution was simplified to acknowledge the dominance of the online payslip. The 2023 survey has maintained the same question, for year-on-year comparisons.

84% USE AN EMPLOYEE SELF-SERVICE PLATFORM TO ENABLE INDIVIDUALS TO ACCESS THEIR PAYSLIPS

The results below demonstrate that the printed payslip still features in some payroll teams, but both methods of delivering printed payslips have decreased overall by 8.27% .

Most respondents, soaring up to 84% , use an employee self-service platform to enable individuals to access their payslips. Emailing payslips directly to employees is the second most popular method, although this has decreased from 2022 by 2.93% .

PAYSLIP DISTRIBUTION METHODS

33% ONLINE emailed to employee direct

84% ONLINE via employee self- service platform

18% PRINTED sent to employee home address

14% PRINTED sent to employee department / direct to client

12% ONLINE emailed to client to distribute

3% OTHER

Percentages have been rounded to the nearest whole number for clarity and in some instances may not total 100%

Payroll record keeping

VIEW YEAR-ON- YEAR DATA

38% Records are stored fully in both digital and paper formats

HOW DO YOU STORE PAYROLL RECORDS?

In the 2022 survey, the question regarding retention of payroll records was added. The 2023 survey has maintained the same question, for year-on-year comparisons to be drawn upon. Digital record keeping is still the most popular method, since it removes the need for storage facilities, required for paper records. Digital records also provide additional options to secure the data more easily than physical records, albeit this isn’t always the case if records aren’t maintained on systems appropriately.

5% Records are stored fully in both digital and paper formats

56% All records are stored digitally

1% All records are stored in paper format

HOW LONG DO YOU RETAIN PAYROLL RECORDS?

The length of retention is also an important consideration in payroll, ensuring that evidence is available should an audit require backdated information. This requirement must also be balanced against the need to store the data, to ensure compliance with the General Data Protection Regulations. 53.74% said they stored records for six years plus the current tax year, making it the most popular response. 33.8% confirmed they stored payroll records for longer. Only a small percentage of respondents stored records for less than this. It is important to note that it is a legal requirement to keep payroll records for no less than three years plus the current tax year, as specified within The Income Tax (Pay As You Earn) Regulations 2003, Regulation 97(8): “For the purposes of this regulation, an employer must keep, for not less than 3 years after the end of the tax year to which they relate, all PAYE records which are not required to be sent to the Inland Revenue by other provisions of these Regulations.”

0.00%

Current tax year only

0.28%

Current tax year + one year

0.28%

Current tax year + two years

6.09%

Current tax year + three years

1.66%

Current tax year + four years

4.16%

Current tax year + five years

53.74%

Current tax year + six years

33.80%

More than six years

VIEW YEAR-ON- YEAR DATA

Percentages have been rounded to the nearest whole number for clarity and in some instances may not total 100%

All protection methods for printed payslips have decreased, which reflects the previous findings, that printed

As mentioned earlier in the report, data security is of utmost importance to payroll professionals. This year’s survey has maintained the question around the security of payslip information as part of the distribution process. For online payslips, employee self-service portals; accessed only by multi factor authentication; and accessed only by personal login credentials, have seen a significant increase of 9.72% and 3.77% respectively.

71%

ONLINE employee self-service portal accessed only by personal login credentials

VIEW YEAR-ON- YEAR DATA

payslips overall are decreasing in popularity

HOW DO YOU PROTECT PAYSLIP INFORMATION DURING THE DISTRIBUTION PROCESS?

32%

ONLINE payslips sent via email to employee email address and are password protected

27%

17%

ONLINE employee self-service portal accessed only by multi-factor authentication

PRINTED payslips send via post not identifiable as a payslip e.g. sent in a plain envelope

PRINTED correct distribution is the responsibility of the relevant department / client

PRINTED correct distribution is the responsibility of the payroll department

PRINTED payslips sent via email to employee email address and are NOT password protected

Percentages have been rounded to the nearest whole number for clarity and in some instances may not total 100%

Change of pay frequency

of respondents have been asked by employees to change the pay frequency 18% 13% VIEW YEAR-ON- YEAR DATA

PAYSLIP STATISTICS

VIEW YEAR-ON- YEAR DATA

of respondents have implemented a change to pay frequency in the last 12 months

It is interesting to see the top two reasons for a change in pay frequency were to ‘improve payroll team efficiencies / increase resource capacity’ and ‘improve cashflow’.

From the respondents who selected ‘Other’ some of the reasons they gave were: ● ‘salaried managers changed from weekly pay to monthly pay’

● ‘regional regulations’ ● ‘cost-of-living crisis’ ● ‘client contractual change’ ● ‘implementation of pay on demand’ ● ‘client request’ was mentioned on five occasions.

VIEW YEAR-ON- YEAR DATA

REASON FOR PAY FREQUENCY CHANGE

33%

Improve team efficiences / increase resource Improve cashflow Other TUPE transfer / company acquisition Improve payroll accuracy Support employee well-being Accommodate a new payroll system

25%

23% 23%

21%

19%

Percentages have been rounded to the nearest whole number for clarity and in some instances may not total 100%

Payroll payments

VIEW YEAR-ON- YEAR DATA

Not surprisingly, Bacs is still the main method of payment used by payroll professionals. From those who selected ‘Other’, all six respondents specified companies who make payments on their behalf. Findings from our research shows those companies have the services to send Bacs, CHAPS and faster payments.

PAYMENT METHODS

88%

14%

Bacs

Cheque

Faster payments

18%

CHAPS

Client makes payment to employees

Other

Percentages have been rounded to the nearest whole number for clarity and in some instances may not total 100%

PROVISION OF AD HOC PAYMENT TO EMPLOYEES BETWEEN PAY DAYS

There has been a 6% decrease in the provision of ad hoc payments done via a manual process outside of payroll, which has been absorbed by a supplementary run, pay on demand / earned wage access platform and ‘other’, which have showed a 2% , 1% and 3% increase, respectively.

11% Yes - via a supplementary run 3%

38% Yes - via a manual process outside of payroll

Yes - via a pay on demand / earned wage access platform

VIEW YEAR-ON- YEAR DATA

The payment date on the FPS should always be the contractual pay date.

6% Yes - other

42% No

If the pay day is brought forward because it falls on a weekend, bank holiday, or pay is made early at Christmas / New Year, the FPS should continue to show the normal, contractual pay date. The main reason for this is the impact the date has on employees who claim universal credit. The results show an increase in non-compliance in this area, increasing from 19% to 26.5% in 2023. Reporting the incorrect date on the FPS could result in issues for some employees in receipt of universal credit.

FPS SUBMISSION FOR EARLY PAY DAYS

26.50%

The date the employee receives the money

57.92%

The employees’ contractual payment date

8.20%

The final date of the pay period

The CIPP is concerned about the volume of non-compliance in this area and is planning to produce regular communications on this topic to promote improved accuracy.

4.92%

Don’t know

2.46%

Other

VIEW YEAR-ON- YEAR DATA

Payslip information

Pay elements and deductions on the payslip are usually broken down for all deductions and payments, with 88.65% confirming this is how they operate. Only 4.49% of respondents just show total pay and deductions, which is an increase from 2022, and 2.11% vary payslip details depending on their clients’ specifications. PAY AND DEDUCTION ELEMENT PAYSLIP BREAKDOWN 2%

The information included on the payslip will vary from business to business and this research always includes a question on the most common information included on the payslip. The table below shows what items are contained on the payslip that don’t specifically relate to payments and deductions. The bank details shown in full has decreased to 3.41% , along with the date of birth reducing to only 1.57%. As shown in this report, a wealth of personal data is shown on a payslip, demonstrating the importance of data security in payroll.

4% The payslip is not broken down by pay and deduction elements

The payslip requirements are defined by the client and therefore vary based on information added

INFORMATION ADDED TO PAYSLIP

5% The payslip is broken down for some pay and deduction elements

98.43% 97.64% 94.75% 92.91% 87.93% 70.87% 67.19% 58.79% 53.54% 46.72% 16.01% 6.82% 4.20% 3.67% 3.41%

Tax code

Name

Payroll number

National Insurance number (in full)

Payment date

National Insurance category

Home address

Payment method

PAYE reference

Pay point (department / location)

Work address

Bank details - partial information e.g. last 4 numbers

Other (please specify)

89% The payslip is broken down for all pay and deduction elements

National Insurance number (in part)

Bank details - all information Bank details - if requested

2.10% 1.57%

VIEW YEAR-ON- YEAR DATA

Date of birth

Percentages have been rounded to the nearest whole number for clarity and in some instances may not total 100%

Payslip information often needs explanation to help employees fully understand their pay. The chart below demonstrates that responding to individual queries as they’re received remains the most popular method to support individuals to better understand their payslips. 44.44% have embraced payslip messages to provide additional information to employees, which shows an increase from 30% in 2022. It may be that the implementation of the health and social care levy increased the popularity of the payslip message functionality within software.

Respondents who said they did something different, describe tools such as:

INTERACTIVE PAYSLIPS

LOCAL INTRANET SITES

NEWSLETTERS AND VIDEOS

VIEW YEAR-ON- YEAR DATA

TOOLS USED TO HELP EMPLOYEES UNDERSTAND THEIR PAY

Physical attachments to payslips

44%

Payslip messages

26%

Self-service communication messages

Self-service portal dashboard tools

19%

20%

Frequently asked questions

Chatbots

54%

No tools used - payroll team responds to individual queries received

Other

Percentages have been rounded to the nearest whole number for clarity and in some instances may not total 100%

Communication is key in any business, and the payslip is a document which is distributed to all employees on a regular basis.

For this reason, businesses can choose to communicate other messages via the payslip. 24.73% confirmed the payslip is used in this way.

There is a slight decrease from the numbers reported in 2022, but needless to say, this is still a popular way to communicate key messages.

DO YOU USE THE PAYSLIP TO COMMUNICATE OTHER EMPLOYEE MESSAGES

79% of respondents included the HMRC message about the health and social care levy between 6 April and 5 November

25% Yes

75% No

Noting the benefits of communicating key messages to employees, this year’s survey asked if respondents used the HMRC message regarding the health and social care levy.

The below graph shows the vast majority did show this message, with only 20.89% of respondents not using the wording advised by HMRC.

Of those who did use the payslip message, 76.57% confirmed they did not receive any queries around the increase to NI brought about by the health and social care levy.

VIEW YEAR-ON- YEAR DATA

Percentages have been rounded to the nearest whole number for clarity and in some instances may not total 100%

Payroll professionals will be familiar with payroll queries forming part of business-as-usual processes. 35.39% of respondents confirmed the tax code that had been applied was the most frequent query. This question can be a challenging conversation for a payroll professional since they can only operate the code that HMRC confirms.

HMRC has recently communicated to the CIPP that it will ‘review how HMRC can embed tax simplification into our Charter’. This is promising, and the CIPP will keep you updated when we hear more.

MOST FREQUENT PAYROLL QUERY

VIEW YEAR-ON- YEAR DATA

Requesting early access to pay details prior to pay day

Overpayment due to payroll error

0.54%

1.88%

2.41%

Payslip not received

Overpayment due to late data sent to payroll

Underpayment due to payroll error

Underpayment due to late data sent to payroll

3.75%

4.02%

23.06%

Unable to access online payslip / portal

23.06%

35.39%

5.90%

Queried tax code applied

Other

Holiday pay Holiday pay continues to be an administrative challenge for many payroll professionals. We must be mindful that holiday pay and holiday entitlement are totally separate and come with separate methods of calculation, meaning more room for error and non-compliance. In January 2023, the Department for Business, Energy and Industrial Strategy (BEIS), now the Department for Business and Trade (DBT), released a consultation around ‘ Calculating holiday entitlement for part-year and irregular hours workers ’. The CIPP held discussions with a vast number of members which fed into our consultation response; members can view this response here . It was apparent from the conversations that the majority of members were not calculating holiday entitlement, nor pay, compliantly, due to complex calculations required.

VIEW YEAR-ON- YEAR DATA

HOLIDAY PAY REFERENCE PERIODS

Holiday is calculated using 52-week reference period (up to 104 weeks for unpaid weeks)

48%

Holiday is calculated using 52-week reference period (max 52 weeks regardless of unpaid weeks)

23%

Holiday is calculated using 12-week reference period

The results of this survey align to the conversations held earlier in 2023. Only 47.84% of respondents are compliantly calculating holiday pay.

Holiday is calculated using an alternative reference period

WE MUST BE MINDFUL THAT HOLIDAY PAY AND HOLIDAY ENTITLEMENT ARE TOTALLY SEPARATE AND COME WITH SEPARATE METHODS OF CALCULATION

Holiday is not calculated using an alternative reference period

14%

21%

Other calculation method

Percentages have been rounded to the nearest whole number for clarity and in some instances may not total 100%

The visibility of holiday pay on the payslip can result in an increase or reduction in employee queries in this area.

● 45.07% don’t separate holiday pay on the payslip ● 25.63% show it as daily rate ● 35.49% display holiday pay as an hourly rate ● 16.62% add a top up to basic pay for holiday payments ● 14.93% use another method.

THE RESULTS HIGHLIGHT AN AREA OF NON- COMPLIANCE SURROUNDING THE COMPLEX PROCESS OF HOLIDAY PAY

Employees and workers must receive normal remuneration while on holiday, therefore many pay elements such as regular overtime, shift premiums and allowances would usually be included in the calculation. The results show many respondents are not including some of these payments within their holiday pay calculations. This again highlights an area of non-compliance surrounding the complex process of holiday pay.

VIEW YEAR-ON- YEAR DATA

PAY ELEMENTS EXCLUDED FROM HOLIDAY CALCULATION

Overtime 24%

27%

58%

Shift premium

Bonus

11%

44%

72%

Other

Commission

Car allowance

Percentages have been rounded to the nearest whole number for clarity and in some instances may not total 100%

NEW FOR 2023

Did you notice an influx in NI queries due to the number of changes made in tax year 2022/23?

Fast-paced change Payroll professionals are becoming accustomed to more change, at a faster rate. This was certainly true in the 2022/23 tax year, where we experienced three changes to NI. The introduction of the health and social care levy, implemented as a 1.25 percentage point increase to class 1, class 1A, class 1B and class 4 NI contributions; the increase to the primary threshold from 6 July 2022; and finally the removal of the health and social care levy. In the 2023 survey, we asked about the impact this fast-paced change had on payroll professionals. The majority of respondents reported they experienced no increase in NI related queries throughout the 2022/23 tax year, which is promising to see. These findings link back to the specific question asked in the survey around whether respondents used the HMRC message on payslips regarding the health and social care levy (please refer back to page 22).

58% No change

7% Unsure

36% Yes

14%

Yes - a substantial amount of additional work

When asked about the additional work created by the changes to NI, 13.69% reported they experienced a substantial amount of additional work. The survey didn’t ask respondents to expand on their answers, therefore we cannot draw any conclusions from these findings. 62.01% stated they experienced a small amount of additional work, with 23.46% stating no increase was experienced.

62%

Yes - a small amount of additional work

Did the number of changes to NI in tax year 2022/23 create additional work for you?

23%

No additional work created

Unsure

Percentages have been rounded to the nearest whole number for clarity and in some instances may not total 100%

When we look back, we consider the turbulence created by the infamous ‘mini-budget’ and the subsequent reversals. We then had further changes announced in the autumn statement, delivered by chancellor, Jeremy Hunt, in November 2022.

66% of respondents reported they:

● held off implementing policies ● hadn’t started making the changes, prior to their withdrawal, or ● experienced no impact to payroll processes following on from the ‘mini-budget’ announcements.

The remaining respondents unfortunately did experience an impact, due to implementation of the new policies, prior to their withdrawals.

DID THE ‘MINI-BUDGET’ IMPACT PROCESSES IN THE PAYROLL DEPARTMENT?

26%

Yes - new policies were implemented following announcement and were subsequently withdrawn, meaning additional work

Yes, new financial planning support provided based on changes, which were withdrawn so planning had to be adjusted, meaning additional work

Yes, we held off implementing new policies due to uncertainty

27%

No, the changes were withdrawn so quickly, we hadn’t started making changes

31%

Percentages have been rounded to the nearest whole number for clarity and in some instances may not total 100%

Financial well-being

A hot topic of conversation within the industry is whether payroll is well placed to assist with the financial well-being of employees.

When asked what organisations / clients are doing to help employees through the cost-of-living crisis, 59.48% of respondents are enabling more hybrid / remote working, which allows employees to save on commuting costs. From the respondents who selected ‘Other’, some of the reasons they gave were: ● loans ● pay on demand / earned wage access ● lunches ● reviewing benefits offered to employees ● employee assistance programme.

The CIPP included this question in the 2023 survey to comprehend what respondents’ thoughts were.

We can see it is a fairly equal split between yes, no and unsure.

WHAT IS YOUR ORGANISATION DOING TO HELP EMPLOYEES THROUGH THE CURRENT ECONOMIC TURBULENCE?

59%

36%

Signposting to advice resources (e.g., MoneyHelper)

Allowing more hybrid / remote working

Allowing employees to work in the office

34% Unsure

40% Yes

32%

30%

Nothing 18%

Offering salary sacrifice schemes

Providing one-off bonuses

27% No

18%

Providing inflationary or above rate salary increases

Other (please specify)

Paying household bills

Percentages have been rounded to the nearest whole number for clarity and in some instances may not total 100%

APPENDICES - YEAR-ON-YEAR DATA

NUMBER OF EMPLOYEES PAID

Number of employees paid

60.0%

50.0%

40.0%

30.0%

20.0%

10.0%

0.0%

<50

51 - 1,000

1,001 - 10,000

>10,000

2015 2016 2018 2020 2021 2022 2023

5.4% 1.7% 9.0% 2.8% 4.8% 5.4% 4.0%

41.8% 52.8%

40.0% 32.7%

12.7% 12.6%

46.44%

32.18% 40.28% 38.56% 37.76% 37.00%

11.27%

48.6% 44.2% 45.6% 51.5%

8.33%

12.50% 11.20%

7.50%

2015 2016 2018 2020 2021 2022 2023

NUMBER OF PAYROLLS PROCESSES

Number of payrolls processed

10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0%

0.0% 5.0%

1 6 - 10 11 - 20 21 - 50 51 - 100 101 - 500 501 - 1,000 Over 1,000 2015 26.4% 40.0% 10.9% 6.4% 3.6% 1.8% 8.2% 0.9% 1.8% 2016 24.7% 40.2% 13.2% 6.3% 6.3% 3.4% 3.4% 1.1% 1.1% 2020 22.76% 37.24% 10.34% 6.21% 4.83% 5.52% 8.97% 0.69% 3.45% 2021 24.73% 31.65% 11.97% 6.12% 6.12% 4.52% 7.71% 2.39% 4.79% 2022 27.98% 32.10% 6.58% 3.70% 7.00% 6.58% 10.70% 2.88% 2.47% 2023 32.92% 31.42% 4.99% 2.74% 3.99% 5.74% 13.22% 1.75% 3.24% 2 - 5

2015 2016 2020 2021 2022 2023

Percentages have been rounded to make the information clearer

PAY FREQUENCIES

Pay frequencies

100.0% 120.0%

0.0% 20.0% 40.0% 60.0% 80.0%

4- weekly/Lunar

Annually

Bi-Annuall y Fortnightly

Monthly

Quarterly

Weekly

2015 19.3% 2016 14.3% 2018 14.8% 2020 14.5% 2021 20.3%

9.2% 6.3%

2.8% 2.3%

14.7% 13.1% 9.89%

98.2% 97.7%

5.5% 5.7%

30.3% 24.6%

4.49%

96.18%

24.72% 31.03% 33.60% 36.44% 34.76%

12.41% 13.87%

4.14% 2.67% 2.97% 2.77%

11.72% 96.55% 16.27% 96.80% 18.64% 96.61% 17.13% 98.99%

6.90% 9.60% 8.90% 8.31%

2022 15.68% 12.71% 2023 18.39% 14.36%

2015 2016 2018 2020 2021 2022 2023

Percentages have been rounded to make the information clearer

WEEKLY PAYROLL PAY DAYS

Weekly payroll pay days

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 100.0%

Monday

Tuesday Wednesday Thursday

Friday 85.3% 81.0%

Saturday

Sunday

2015 8.8% 2016 4.8% 2018 7.69%

8.8% 4.8%

20.6%

29.4% 42.9%

2.9% 4.8%

0.0% 0.0%

9.5%

7.69% 11.54% 27.69% 83.85% 3.08%

2.31% 0.00% 2.27% 1.14% 3.60%

2020 10.64% 4.26% 10.64% 29.79% 87.23% 2.13% 2021 10.61% 7.58% 14.39% 41.67% 75.00% 6.06% 2022 14.77% 4.55% 12.50% 35.23% 88.64% 4.55% 2023 13.67% 10.79% 18.71% 41.73% 87.05% 5.76%

2015 2016 2018 2020 2021 2022 2023

Percentages have been rounded to make the information clearer

FORTNIGHTLY PAYROLL PAY DAYS

Fortnightly payroll pay days

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 100.0%

Monday

Tuesday Wednesday Thursday

Friday 73.3% 88.0%

Saturday

Sunday

2015 0.0% 2016 4.0% 2018 5.00% 2020 5.26% 2021 7.55%

6.7% 4.0%

26.7%

20.0% 12.0%

0.0% 0.0%

0.0%

3.33% 5.26% 9.43%

3.33% 25.00% 80.00% 0.00% 0.00% 15.79% 89.47% 0.00% 9.43% 26.42% 83.02% 0.00%

1.67% 0.00% 1.89% 2.33% 0.00%

2022 4.65% 11.63% 6.98% 23.26% 86.05% 2.33% 2023 12.50% 12.50% 12.50% 25.00% 84.72% 0.00%

2015 2016 2018 2020 2021 2022 2023

Percentages have been rounded to make the information clearer

4-WEEKLY PAYROLL PAY DAYS

4-weekly payroll pay days

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 100.0%

Monday

Tuesday Wednesday Thursday

Friday 55.6% 69.6%

Saturday

Sunday

2015 0.0% 2016 4.3% 2018 6.56% 2020 5.00% 2021 3.57%

11.1%

27.8% 13.0%

33.3% 30.4%

5.6% 0.0%

0.0% 0.0%

8.7%

1.64% 5.00% 0.00%

8.20% 18.03% 81.97% 0.00% 5.00% 20.00% 90.00% 0.00% 3.57% 14.29% 85.71% 0.00%

1.64% 0.00% 0.00% 2.78% 1.28%

2022 11.11% 11.11% 11.11% 11.11% 91.67% 5.56% 2023 16.67% 14.10% 12.82% 15.38% 87.18% 3.85%

2015 2016 2018 2020 2021 2022 2023

Percentages have been rounded to make the information clearer

MONTHLY PAYROLL PAY DATE

Monthly payroll pay dates

45.0%

40.0%

35.0%

30.0%

25.0%

20.0%

15.0%

10.0%

5.0%

0.0%

2016

2018

2020

2021

2022

2023

Percentages have been rounded to make the information clearer

PAYSLIP DISTRIBUTION METHODS

Payslip Distribution methods

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

Online - emailed to client to distribute

Other

Online - via employee self service platform

Online - emailed to employee direct

Printed - sent to employee home address

Printed - sent to employee department/direct to client

2022 2023

Percentages have been rounded to make the information clearer

HOW DO YOU PROTECT PAYSLIP INFORMATION DURING THE DISTRIBUTION PROCESS

How do you protect payslip information during the distribution process?

0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00% 70.00% 80.00%

Online - payslips sent via email to employee email address and are NOT password protected

Printed - correct distribution is the responsibility of the payroll department

Printed - correct distribution is the responsibility of the relevant department / client

Printed - payslips sent via post not identifiable as a payslip e.g. sent in a plain envelope

Online - employee self-service portal accessed only by multi factor authentication

Online - payslips sent via email to employee email address and are

Online - employee self-service portal accessed only by personal login credentials

password protected

2022 2023

Percentages have been rounded to make the information clearer

HOW DO YOU STORE PAYROLL RECORDS

How do you store payroll records?

0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00%

All records are stored in paper format

Records are stored fully in both digital and paper formats

Records are stored in a mix of digital and paper formats

All records are stored digitally

2022 2023

Percentages have been rounded to make the information clearer

RETAINING PAYROLL RECORDS

Retaining payroll records

0% 10% 20% 30% 40% 50% 60%

Current tax year only

Current tax year + 1 year

Current tax year + 2 years

Current tax year + 3 years

Current tax year + 4 years

Current tax year + 5 years

Current tax year + 6 years

More than 6 years

2022 2023

Percentages have been rounded to make the information clearer

REQUEST TO CHANGE PAY FREQUENCY

Request to change pay frequency

0% 20% 40% 60% 80% 100%

Yes

Have for some clients, but not all

2022 2023

Percentages have been rounded to make the information clearer

IMPLEMENTED A CHANGE TO PAY FREQUENCY

Implemented a change to pay frequency

100%

80%

60%

40%

20%

Yes

2022 2023

Percentages have been rounded to make the information clearer

REASON FOR CHANGE TO PAY FREQUENCY

Reason for change to pay frequency

45.00%

40.00%

35.00%

30.00%

25.00%

20.00%

15.00%

10.00%

5.00%

0.00%

Improve cashflow

Other

TUPE transfer / Company Acqui sition

Improve payroll accuracy

Support employee wellbeing

Accomododate a new payroll system

Improve payroll team efficiences /

Increase resource

2022 2023

Percentages have been rounded to make the information clearer

PAY METHODS

Payment Method

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Bacs

Cheque

Faster Payments

CHAPS Client makes payment to employees

Other

2022 2023

Percentages have been rounded to make the information clearer

PROVISION OF AD-HOC PAYMENT TO EMPLOYEES BETWEEN PAY DAYS

Provision of ad hoc payment to employees between pay days

0.00% 10.00% 20.00% 30.00% 40.00% 50.00%

Yes - other

Yes - via a supplementary run

Yes - via a pay on demand / earned wage access platform

Yes - via a manual process outside of payroll

2022 2023

Percentages have been rounded to make the information clearer

FPS SUBMISSION FOR EARLY PAY DAYS

FPS Submission for early pay days

0% 10% 20% 30% 40% 50% 60% 70%

The employee's contractual pay date

The final day of the pay period

Other

Don't know

The date the employee recieves the money in their account

2022 2023

Percentages have been rounded to make the information clearer

PAY AND DEDUCTION ELEMENT PAYSLIP BREAKDOWN

Pay and deduction element payslip breakdown

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Payslip requirements are defined by the client and therefore vary based on the above

The payslip is not broken down for all pay and deduction elements

The payslip is not broken down for some pay and deduction elements

The payslip is not broken down by pay and deduction elements

2022 2023

Percentages have been rounded to make the information clearer

TOOLS USED TO HELP EMPLOYEES UNDERSTAND THEIR PAY

Tools used to help employees understand their pay

0% 10% 20% 30% 40% 50% 60%

Other (please specify)

Self service portal dashboard tools

Frequently asked questions

Chatbots

No tools used, payroll team responds to individual queries received

Physical attachments to payslips

Payslip messages

Self service portal communication messages

2022 2023

Percentages have been rounded to make the information clearer

DO YOU USE THE PAYSLIP TO COMMUNICATE OTHER EMPLOYEE MESSAGES

Do you use the payslip to communicate other employee messages?

0% 10% 20% 30% 40% 50% 60% 70% 80%

2022

2023

Yes No

Percentages have been rounded to make the information clearer

MOST FREQUENT PAYROLL QUERY

Most frequent payroll query

40.00%

35.00%

30.00%

25.00%

20.00%

15.00%

10.00%

5.00%

0.00%

Unable to access online payslip / portal

Queried tax code applied

Underpayment due to payroll error

Other

Underpayment due to late data sent to payroll

Overpayment due to late data sent to payroll

Overpayment due to payroll error

Payslip not received

Requesting early access to pay details prior to pay day

2022 2023

Percentages have been rounded to make the information clearer

HOLIDAY PAY REFERENCE PERIODS

Holiday pay reference periods

0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00%

Other calculation method

Holiday is not calculated based on a reference period

Holiday is calculated using an alternative reference period

Holiday is calculated using 12-week reference period

Holiday is calculated using 52-week reference period (max 52 weeks regardless of unpaid weeks)

Holiday is calculated using 52-week reference period (up to 104 weeks for unpaid weeks)

2022 2023

Percentages have been rounded to make the information clearer

PAY ELEMENTS EXCLUDED FROM HOLIDAY CALCULATION

Pay elements EXCLUDED from holiday calculation

0% 10% 20% 30% 40% 50% 60% 70% 80%

Overtime Shift Premium Bonus

Commission Car allowance Other

2022 2023

Percentages have been rounded to make the information clearer

Don’t wait until it’s too late

Payroll Assurance Scheme Can you afford penalties of up to £10,000* per day for non-compliance? Make sure your people and processes are working, and get ahead of any nonconformities before they become a problem.

Visit cipp.org.uk/PAS to see how we can prepare you

* Correct at time of publication

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