The Payslip Statistics Report explores trends impacting payroll processes, payslips and compliance.
PAYSLIP STATISTICS REPORT 2024 COMPILED AND EDITED BY SARAH SMITH, CIPP POLICY AND RESEARCH OFFICER
SPONSORED BY
This report emphasises the importance of payroll data for employee financial wellbeing and organisational success. It discusses the underutilisation of pay data, the benefits of digital payslip solutions, and the role of payroll teams in driving change.
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CONTENTS
Experian foreword
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Payslip information
16 17 18 19 20 21 23 24 27 28
Pay and deduction elements Understanding payslips Frequent payroll queries
Executive summary
6
Key findings
7
Employees and frequencies Number of employees paid Number of payrolls processed Payroll frequencies operated Popular pay days and dates Change of pay frequency
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Payslip messaging Payslip distribution
8 9 9
Payroll record keeping and storage
Holiday pay
10 12 13
Financial wellbeing
Support offered
Payroll payments
Core demographics
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New for 2024
15
Appendices - year-on-year data
33
Cost per payslip
15
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EXPERIAN FOREWORD
In today’s rapidly evolving business environment, payroll data is emerging as a pivotal player in the financial wellbeing of employees and, by extension, overall organisational success.
Experian is in a unique and privileged position in that we hold financial data that enables us to enrich the lives of millions of consumers. We believe that this data has the power to change lives by helping businesses to grow and drive better outcomes for their employees. We’re honoured to be the sponsors of this year’s report, which represents our commitment to leveraging the power of pay to support our clients, their employees, and the wider consumer market. Payday is a great opportunity for businesses to maximise their employee wellbeing initiatives. PayDashboard, our digital payslip solution, gives users access to pay, innovative financial tools and benefits, while Work Report TM enables users to utilise their pay data for easier access to mortgages and other loans. Accessing this data in a timely manner is crucial for consumers, but it also benefits lenders by enabling them to understand a consumer’s financial health. Yet the respondent data shows us that leveraging the power of pay data still remains largely underutilised in the wider market. This is evidenced by the time, cost and software challenges that many still perceive to be the inevitable outcome of switching to a digital payslip solution. Three-quarters of respondents have yet to utilise payslips for anything beyond basic pay data, yet those that have are successfully using the payslip portal for employee communication of all kinds. Notably, our own experience demonstrated a remarkable 551% surge in employee engagement when we began incorporating reward information within the payslip last year. This really reveals the transformative impact that payday has for bringing employees closer to all the great benefits that companies provide.
Paul Speirs Managing Directory – UKI Consumer Information Services & Analytics - Experian
continued overleaf...
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At Experian, we believe that financial resilience is achieved by giving employees the tools to help them to understand the fundamentals of their financial livelihoods – all of which begin on payday. We see that a quarter of respondents still receive tax code queries, while more than half respond individually to employee payslip queries. In all likelihood, a considerable amount of time and resource is being used to resolve what technology could, and does, achieve within seconds. The quarter of respondents still emailing payslips and the 14% still printing payslips could be missing out on providing the employees that they pay with greater financial benefits, and a digital journey that they’re accustomed to in every other part of their lives. As digital natives, Millennials and Gen-Z enjoy instantaneous financial transactions; whether it’s opening a new bank account, shopping, or investing. Payroll sits at the helm of the processes that enable the same journey on payday, evidencing just how influential payroll teams are in driving change within an organisation. It’s encouraging to see that almost half of respondents agree, considering Payroll to be in a prime position to assist with employee financial wellbeing. We can also see that businesses are taking proactive measures to foster a culture of wellbeing and support, by giving employees the choice of how and where they would like to work. This is one of many measures we have rolled out across Experian, the success of which is partly due to the collaborative efforts of HR and Payroll teams. Pay data is a rich source of information with the ability to transform the lives of employees, while helping businesses to thrive. We’re thrilled to be working with the CIPP on delivering this report to the many thousands of payroll professionals – the custodians of this data – in 2024.
“PAY DATA IS A RICH SOURCE OF INFORMATION WITH THE ABILITY TO TRANSFORM THE LIVES OF EMPLOYEES, WHILE HELPING BUSINESSES TO THRIVE” Experian
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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 is responsible for collating the research and is thankful to everyone who took the time to respond to the survey to generate the results in this report. 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, we have included two questions provided by the Money and Pensions Service (MaPS) on how your organisation supports employee financial wellbeing. MaPS aim to understand what workplace support is available now and what more needs to be done to enable this in the years to come. For the 2023 report, the policy team performed a data restructure to align the dates presented in the report. Some 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. For consistency purposes, the dates have been amended to represent the year the data was gathered. This feels the correct way to present the data, rather than the tax year it was obtained in. We will continue to compare the last 7 years of data in the report; however, the dates may look inconsistent due to the restructure. The 2024 survey was open for six weeks from 5 February to 15 March 2024, and this year saw a 22% increase in responses compared to 2023. The Policy team is delighted that so many payroll professionals have taken part again this year and hope the trend will continue to grow, with more valuable insights being provided each year. NB: When discussing percentage changes, we are referring to the overall percentage that question response received. For example; monthly payrolls have decreased by 5% - this shows last year 50% of respondents ran a monthly payroll, whereas this year it’s decreased to 45%.
Policy and research team The policy team 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
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KEY FINDINGS
57.57% DON’T USE ANY TOOLS TO HELP EMPLOYEES UNDERSTAND THEIR PAYSLIP
BACS PAYMENTS CONTINUE TO DOMINATE PAYMENTS FOR PAYROLL
COMPLIANCE WITH THE EMPLOYMENT RIGHT ACT’S (ERA) RIGHT TO AN ITEMISED PAY STATEMENT HAS INCREASED SLIGHTLY, NOW REACHING 91.16%
FRIDAY REMAINS THE MOST POPULAR PAY DAY FOR WEEKLY, FORTNIGHTLY AND 4-WEEKLY PAYROLLS THE MOST COMMON PAY DAY CONTINUES TO BE THE LAST WORKING DAY OF THE MONTH 97% MONTHLY PAY REMAINS THE MOST COMMON PAY FREQUENCY WITH 96.60% OPERATING A MONTHLY PAYROLL
COMPLIANCE AROUND FULL PAYMENT SUBMISSION (FPS) FOR PAY DAY REPORTING HAS INCREASED BY MORE THAN 10%
THE NUMBER OF PAYROLL PROFESSIONALS THAT STORE ALL PAYROLL RECORDS ELECTRONICALLY IS STILL INCREASING, WITH A FURTHER RISE OF 8.57%
PRINTED PAYSLIPS CONTINUE TO DROP, FALLING BY 8.39% THIS YEAR
51.12% OF RESPONDENTS PLAN ON USING ROLLED UP HOLIDAY PAY FOR PART-YEAR AND IRREGULAR HOURS WORKERS COMPLIANCE ON HOLIDAY PAY REFERENCE PERIODS FELL BY 6.84%
RETENTION OF PAYROLL RECORDS FOR SIX YEARS PLUS THE CURRENT TAX YEAR HAS GROWN 26.49%
HOLIDAY PAY
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In most cases percentages have been rounded to two decimal places for clarity and may not add up to 100%. Graphics may have been rounded to whole percentages.
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Number of employees paid When gathering payroll data for comparison, one of the fundamental questions will always be, how many employees are paid on your payroll? While that may be a very straight forward answer for those respondents that have an in-house payroll department, it raises the question of how respondents from an outsourced environment have answered, with only being able to select one option. VIEW YEAR-ON- YEAR DATA
EMPLOYEES AND FREQUENCIES
48%
pay 51 – 1,000 employees
36% pay 1,001 – 10,000 employees
12% pay more than 10,000 employees
pay less than 50 employees 4%
Although we consistently see the most common range is between 51 – 1,000 employees, the biggest change this year was a 4.19% increase in the over 10,000 employees category.
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In most cases percentages have been rounded to two decimal places for clarity and may not add up to 100%. Graphics may have been rounded to whole percentages.
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Number of payrolls processed
Payroll frequencies operated
VIEW YEAR-ON- YEAR DATA
VIEW YEAR-ON- YEAR DATA
Continuing the trend from previous years, the responses for this year have remained consistent. The majority remains with one payroll , closely followed by the two – five category. The data shows those that work for an in-house payroll team have the least amount of payrolls, with 39.74% having one PAYE reference and 36.05% having between two and five .
Unsurprisingly monthly is still by far the preferred pay frequency, even though the result is 2.39% lower than last year.
OVERALL PREFERRED PAY FREQUENCY
17%
Weekly 35%
Annually 11%
4-weekly / lunar
On the other hand, 47.79% of respondents that work in an outsourced / bureau service team have 101-500 different payrolls to process.
97%
15%
8%
3%
32%
1
Monthly
Quarterly
Bi-annually
Fortnightly
29%
2-5
96.33% of the in-house respondents process a payroll on a monthly basis, compared to outsourced showing:
7%
6-10
5%
11-20
IN-HOUSE PREFERRED PAY FREQUENCY
3%
21-50
4-weekly / lunar 60%
Annually 53%
Weekly 76%
5%
51-100
14%
101-500
98%
10%
55%
Quarterly 36%
1%
501-1,000
Monthly
Bi-annually
Fortnightly
4%
Over 1,000
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In most cases percentages have been rounded to two decimal places for clarity and may not add up to 100%. Graphics may have been rounded to whole percentages.
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Popular pay days and dates
As with most pay frequencies, Friday is the favoured option.
Every weekday has decreased this year, with Wednesday and Thursday being the biggest drops at 6.43% and 7.23% respectively. Both Saturday and Sunday have increased slightly. Friday still leads the way with Thursday a distant second.
No respondents indicated that they pay a fortnightly payroll on a weekend again this year, and the biggest changes are an 11.22% reduction for a Monday pay day and Tuesday dropped by almost half.
However, Friday has fallen by 7.87% this year, with only Thursday and Sunday seeing an increase.
Friday is consistently the most popular option, with a slight increase this year taking it up to 85.90%.
WEEKLY PAYROLL PAY DATES
FORTNIGHTLY PAYROLL PAY DATES
4-WEEKLY PAYROLL PAY DATES
12% Monday
9% Tuesday
1% Monday
7% Tuesday
9% Monday
5% Tuesday
12% Wednesday
10% Wednesday
11% Wednesday
29% Thursday
86% Friday
79% Friday
2% Saturday
34% Thursday
85% Friday
24% Thursday
6% Saturday
2% Sunday
4% Sunday
VIEW YEAR-ON- YEAR DATA
VIEW YEAR-ON- YEAR DATA
VIEW YEAR-ON- YEAR DATA
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In most cases percentages have been rounded to two decimal places for clarity and may not add up to 100%. Graphics may have been rounded to whole percentages.
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VIEW YEAR-ON- YEAR DATA
MONTHLY PAYROLL PAY DATES
The last working day of the month is the firm favourite for a monthly payroll at 36.98% , with a small group of commonly used options in the mid field, including 15th, 25th, 28th, last Friday and last working day of the month. In-house payrolls generally favour 25th of the month and last working day of the month with 21.62% and 28.65% respectively.
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5% 1% 1% 1% 9% 4% 3%
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2% 1% 6% 1% 2% 1% 1%
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21
16% 2% 1% 3% 2% 10% 6%
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25
26
27
28
4% 5% 9% 27% 12% 12% 26%
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30
31
5% 6% 7%
37% Last working day of the month
16% Last day of the month
1% Last Monday of the month
1% Last Tuesday of the month
20% Last Friday of the month
7% Last Thursday of the month
1% Last Wednesday of the month
6% Other
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In most cases percentages have been rounded to two decimal places for clarity and may not add up to 100%. Graphics may have been rounded to whole percentages.
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Change of pay frequency
VIEW YEAR-ON- YEAR DATA
REASON FOR PAY FREQUENCY CHANGE
The most common reasons for pay frequency change were cost saving implications across the business including time saving and efficiency in the payroll department.
HAVE YOU CHANGED PAY FREQUENCY IN THE LAST TWO YEARS?
Other reasons included ‘Client’s request’, ‘To align with other business functions’, ‘Staff retention’, and ‘Implementation of time and attendance system’.
5% Yes
10% Changed for some clients, but not all
30%
Other (please specify)
28%
Improve payroll team efficiencies / Increase resource capacity
22%
Improve cashflow
85% No
22%
TUPE transfer / Company acquisition
18%
Improve payroll accuracy
13%
A very small percentage of respondents have changed their pay frequency in the last two years, which is 7.48% less than last year.
Accommodate a new payroll system
12%
Support employee wellbeing
12%
VIEW YEAR-ON- YEAR DATA
Employee’s requested it to suit budgeting needs
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In most cases percentages have been rounded to two decimal places for clarity and may not add up to 100%. Graphics may have been rounded to whole percentages.
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Payroll payments
VIEW YEAR-ON- YEAR DATA
Bacs still remains the most popular payment method by far, even with a 1.58% drop this year.
87% BACS STILL REMAINS THE MOST POPULAR PAYMENT METHOD BY FAR, EVEN WITH A 1.58% DROP THIS YEAR
Faster payments increased by 2.60% and other options by 3.27% , which included: ● ‘Single Euro Payments Area (SEPA)’ ● ‘Modulr’ ● ‘Cash’. PAYMENT METHODS
87%
2%
17%
Bacs
Cheque
Faster payments
2%
14%
5%
CHAPS
Client makes payment to employees
Other
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In most cases percentages have been rounded to two decimal places for clarity and may not add up to 100%. Graphics may have been rounded to whole percentages.
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DO YOU PROVIDE INTERIM / AD-HOC PAYMENTS TO EMPLOYEES BETWEEN PAY DAYS?
This year’s results show more payroll departments are making payments between pay days . With the recent cost of living crisis and pay on demand / earned wage access (EWA) becoming more popular, it’s clear that payroll departments are amending process to support employee’s needs. Pay on demand / earned wage access has more than doubled from 3.32% to 7.66% this year.
33% No
14% Yes - via a supplementary run
6% Yes - other
54% Yes - via a manual process outside of payroll
8% Yes - via a pay on demand / earned wage access platform
VIEW YEAR-ON- YEAR DATA
Last year the result showed a decrease in compliance with only 57.92% indicating that they always use the contractual pay date on the full payment submission (FPS), even if paying early for a bank holiday or over Christmas. Concerned about the impact reporting the wrong date can have, especially those that claim universal credit, the CIPP has produced regular communications throughout the year to promote awareness and help improve accuracy. The results show a positive swing with respondents reporting the date the money is credited to the bank account dropping by 12.68% and the employees contractual pay date has increased by 10.70% . However, although this a great step in the right direction, it means that more than 30% of respondents are still non-compliant.
FPS SUBMISSION FOR EARLY PAY DAYS
69%
The employee's contractual pay date
14%
The date the employee recieves the money in their account
10%
The final day of the pay period
4%
Don't know
2%
Other
2%
Different dates dependant upon clients request
VIEW YEAR-ON- YEAR DATA
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NEW FOR 2024 Cost per payslip
Recently, members have been asking the policy team about the charges per payslip for part and fully managed services and why this hasn’t been reported on previously. Therefore, we have included the questions in this year’s Payslip Statistics Survey and we will continue to include both questions each year going forward.
The answers from both questions varied greatly from £3 to £10 for part-managed services and £1 to £15 for fully managed services.
HOW MUCH DOES YOUR BUSINESS CHARGE PER PAYSLIP?
£5.39 This was the average price per payslip, with the most popular answers being £3, £5 and £10. £6.71 This was the average price per payslip, with the most popular answers being £4, £5, and £6.
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8
8
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6
4
3
3
3
2
2
2
2
1
1
0
0
2
4
6
8
10
12
14
16
Price per payslip
Part managed service
Part managed service
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With businesses having their own requirements and preferences, and payroll software having a range of options and capabilities, payslip information can vary considerably. The table below shows the most common items shown on payslips that don’t relate to payments and deductions. A comparison of the year-on-year results shows that very little has changed compared to last year. The volume of personal data contained in a payslip still highlights the importance of data protection and the security required for sending payslips.
PAYSLIP INFORMATION
PERSONAL INFORMATION ADDED TO PAYSLIP
98% 97% 95% 91% 89% 71% 69% 63% 53% 48% 19%
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
9% 8% 7% 5% 2% 2%
Bank details - partial information e.g. last 4 numbers
National Insurance number (in part)
Other (please specify)
Bank details - all information
Date of birth
Bank details - if requested
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In most cases percentages have been rounded to two decimal places for clarity and may not add up to 100%. Graphics may have been rounded to whole percentages.
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Pay and deduction elements Under the Employment Rights Act 1996 payslips must contain gross pay, deductions and net pay. In addition to the statutory requirements for a payslip, best practice of providing a full breakdown of all pay and deduction elements has grown in popularity by 2.51% this year. The number of respondents indicating that the payslip is not broken down by elements has reduced by 2.68% , falling to just 1.81%. VIEW YEAR-ON- YEAR DATA
PAY AND DEDUCTION ELEMENT BREAKDOWN 2%
BEST PRACTICE OF PROVIDING A FULL
2% Payslip is not broken down by pay and deduction elements 5%
Payslip requirements are defined by the client and therefore vary based on information added
BREAKDOWN OF ALL PAY AND DEDUCTION ELEMENTS HAS GROWN
Payslip is broken down for some pay and deduction elements
IN POPULARITY BY 2.51% THIS YEAR
91% Payslip is broken down for all pay and deduction elements
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In most cases percentages have been rounded to two decimal places for clarity and may not add up to 100%. Graphics may have been rounded to whole percentages.
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Understanding payslips
TOOLS USED TO HELP EMPLOYEES UNDERSTAND THEIR PAY
At a time when personal finances are at the forefront of the mind for most UK residents, it’s more important than ever that everyone should understand their payslip and can check that they are being paid correctly. Unfortunately, this is rarely the case. Payroll professionals often try to communicate upcoming changes in legislation or if something new is being rolled out, but the fact remains that a large number of working people in the UK still don’t understand the basics of the payslip and many are too embarrassed to ask for help. It’s so important everyone understands their payslip and we will continue to promote ways in which we can help raise this awareness. As part of this initiative, the CIPP has produced a new interactive ‘understanding your payslip’ tool, which cuts the jargon that can baffle people looking at their payslips. You can find the tool at https://www.cipp.org.uk/payslip . Use of the tool could reduce queries into payroll departments. This year has a reduction in the proactive options, with payslip messages 8.66% lower than in 2023 and a further 3.87% of respondents not using any tools compared to last year.
58%
No tools used, payroll team responds to individual queries
36%
Payslip messages
21%
Self service portal communication messages
20%
Frequently asked questions
18%
Self service portal dashboard tools
10%
Other (please specify)
3%
57.57% of respondents instead opt to handle individual queries as they arise.
Chatbots
2%
VIEW YEAR-ON- YEAR DATA
Physical attachments to payslips
18
In most cases percentages have been rounded to two decimal places for clarity and may not add up to 100%. Graphics may have been rounded to whole percentages.
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Frequent payroll queries There has been a 10.39% reduction in queries on the tax code applied, however it still stands at 25% of payroll queries, despite the fact that payroll professionals are only responsible for implementing the code and not the calculation and allocation of the code.
HM Revenue and Customs (HMRC) are currently promoting their personal tax app, where employees can find their personal details, including national insurance number and details of their tax code. There is also a range of ways to find information and submit any changes to personal circumstances.
Encouraging employees to refer to the HMRC app could greatly reduce the volume of queries into the payroll department in the long term. More information can be found at https://www.gov.uk/guidance/download-the-hmrc-app .
VIEW YEAR-ON- YEAR DATA
MOST FREQUENT PAYROLL QUERY
26%
25%
18%
16%
5%
Underpayment due to late data sent to payroll
Queried tax code applied
Unable to access online payslip / portal
Support to understand their pay / payslip
Other
4%
3%
2%
1%
0%
Underpayment due to payroll error
Payslip not received
Overpayment due to late data sent to payroll
Requesting early access to pay details prior to pay day
Overpayment due to payroll error
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In most cases percentages have been rounded to two decimal places for clarity and may not add up to 100%. Graphics may have been rounded to whole percentages.
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Payslip messaging With all employees receiving a payslip on a regular basis, payslip messaging can be an easy win to share news, updates or any ad hoc messages with the workforce. This year’s results shows only 19.17% of respondents use the payslip to communicate, a further reduction from 2022. This begs the question, is there a reason for the low numbers and a year- on-year decline, or is there a way to better use the function? Last year’s report showed that 79.11% of respondents used payslip messaging to communicate HMRC’s message, regarding the health and social care levy to employees. 76.57% of those respondents confirmed they did not receive any queries relating to the national insurance increase. As noted earlier, with a large number of queries received by a payroll department relating to the employees understanding of their payslip and tax code, payroll professionals benefit from signposting links to help guides like CIPP’s understanding your payslip tool on the payslip message.
OF RESPONDENTS USE THE PAYSLIP TO COMMUNICATE ADDITIONAL MESSAGING 19%
DO YOU USE THE PAYSLIP AS A METHOD TO COMMUNICATE OTHER MESSAGES TO YOUR, OR YOUR CLIENTS’ EMPLOYEES?
THIS IS A FURTHER REDUCTION FROM 2022
19% Yes
72% No
9% For some clients only
VIEW YEAR-ON- YEAR DATA
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In most cases percentages have been rounded to two decimal places for clarity and may not add up to 100%. Graphics may have been rounded to whole percentages.
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Payslip distribution A reduction in the number of payslip that are being printed comes as no surprise, the year-on- year trend shows a slow but steady decline. VIEW YEAR-ON- YEAR DATA
Other methods specified included: ● Printed and posted for leavers ● Emailed to people on long term sick / parental leave ● Posted to those that are not comfortable or able to use online services
PAYSLIP DISTRIBUTION METHODS
26% ONLINE emailed to employee direct
84% ONLINE via employee self- service platform
13% PRINTED sent to employee home address
10% PRINTED sent to employee department / direct to client
8% ONLINE emailed to client to distribute
3% OTHER
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In most cases percentages have been rounded to two decimal places for clarity and may not add up to 100%. Graphics may have been rounded to whole percentages.
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Earlier findings in the payslip information section, highlighted the volume of personal data contained in payslips and the importance of data protection.
64%
ONLINE employee self- service portal accessed only by personal login credentials
With a high level of security required when sending payslips, it is surprising to see that the number of payslips being sent via email with password protection has decreased by 7.40% and the number of payslips being sent via email without password protection has increased by 3.78%.
VIEW YEAR-ON- YEAR DATA
HOW DO YOU PROTECT PAYSLIP INFORMATION DURING THE DISTRIBUTION PROCESS?
29%
ONLINE employee self- service portal accessed only by multi-factor authentication
24%
14%
ONLINE payslips sent via email to employee email address and are password protected
6%
6%
PRINTED payslips sent via post not identifiable as a payslip e.g. sent in a plain envelope
4%
PRINTED correct distribution is the responsibility of the relevant department / client
ONLINE payslips sent via email to employee email address and are NOT password protected
PRINTED correct distribution is the responsibility of the payroll department
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In most cases percentages have been rounded to two decimal places for clarity and may not add up to 100%. Graphics may have been rounded to whole percentages.
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Payroll record keeping and storage There have been two significant changes this year, firstly the number of respondents keeping records for six years plus the current tax year has increased by 26.49% . VIEW YEAR-ON- YEAR DATA
HOW LONG DO YOU RETAIN PAYROLL RECORDS?
80%
Current tax year + six years
8%
More than six years
Secondly, the more than six years option has dropped by 25.89% to just 7.91% . The most popular answer for the duration if more than six years, was seven or ten years.
6%
Current tax year + five years
4%
Current tax year + three years
Data comparison between in-house and outsourced respondents shows that in-house teams are keeping the data for longer:
2%
Current tax year + four years
0%
Current tax year only
IN-HOUSE 6 = 80.91% 6+ = 8.55%
OUTSOURCED 6 = 77.22% 6+ = 5.06%
0%
Current tax year + one year
0%
Current tax year + two years
A clear pattern is forming, with the year-on-year figures showing a continuous decline in records being stored in a mix of paper and digital formats, down a further 10.18% this year.
HOW DO YOU STORE PAYROLL RECORDS?
28% Records are stored in a mix of digital and paper formats
While on the other side there is a continuous increase in all records being stored digitally, up by 8.57% this year.
6% Records are stored fully in both digital and paper formats
Response data shows that no outsourced service teams indicated that all their records are stored in paper format. The options of ‘stored in a mix of paper and digital’ and ‘both fully in paper and digital’ are both lower than in-house responses at 18.99% and 7.59% respectively, compared with 29.63 and 5.98% respectively.
65% All records are stored digitally
1% All records are stored in paper format
VIEW YEAR-ON- YEAR DATA
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In most cases percentages have been rounded to two decimal places for clarity and may not add up to 100%. Graphics may have been rounded to whole percentages.
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Holiday pay Holiday pay continues to be a contentious, complicated admin burden for payroll professionals.
The main cause of confusion is that holiday pay and holiday entitlement are two separate parts of the puzzle, each with different calculation methods, which is creating the risk of errors and non-compliance.
THE MAIN CAUSE OF CONFUSION IS THAT HOLIDAY PAY AND HOLIDAY ENTITLEMENT ARE TWO SEPARATE PARTS OF THE PUZZLE, EACH WITH DIFFERENT CALCULATION METHODS
This year’s results shows a 6.84% decline in respondents that are calculating holiday pay as instructed by government guidance. However, calculations included in ‘other calculation method’ responses may achieve a compliant result.
HOLIDAY PAY REFERENCE PERIODS
Holiday is calculated using 52-week reference period (up to 104 weeks for unpaid weeks)
Holiday is calculated using 52-week reference period (max 52 weeks regardless of unpaid weeks)
41%
27%
Holiday is calculated using 12-week reference period
Holiday is calculated using an alternative reference period
6%
5%
Holiday is not calculated using an alternative reference period
18%
20%
Other calculation method
VIEW YEAR-ON- YEAR DATA
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In most cases percentages have been rounded to two decimal places for clarity and may not add up to 100%. Graphics may have been rounded to whole percentages.
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With 72.61% of respondents paying normal pay for all annual leave, these results show it is easier to calculate one rate of pay for all annual leave, which removes two different calculations and extra processes, in an already complex and time-consuming process. Will we see an increase to this outcome next year, now more payments need to be taken into consideration for the calculation of normal pay?
The new holiday pay legislation takes effect for leave years starting on or before 1 April 2024, the new regulations define normal remuneration:
● Payments intrinsically linked to performance of work ● Payments relating to professional or personal status ● Regular payments such as overtime in the preceding 52 weeks.
The new legislation means that more payments now need to be taken into consideration when paying employees their normal rate of pay whilst on annual leave.
PAY ELEMENTS INCLUDED IN HOLIDAY PAY CALCULATION
HOLIDAY PAY TOP UP WEEKS
11% A combination based on clients preference
16% Regulation 13 leave only (4 weeks)
Overtime 84%
56%
34%
Shift premium
Bonus
14%
33%
19%
Other
Commission
Car allowance
73% All leave up to 5.6 weeks
Note: Last year’s survey looked at elements that are excluded from the calculation of normal pay. This year the question has been changed to included elements used in the calculation. This method provides a clear understanding if the requirements are being met for the complex and ever changing holiday pay rules
25
In most cases percentages have been rounded to two decimal places for clarity and may not add up to 100%. Graphics may have been rounded to whole percentages.
SPONSORED BY
Following the changes to legislation for part-year and irregular hour workers and how they can accrue annual leave from holiday years starting on or after 1 April 2024, it is unsurprising to see that the majority of respondents seek to use rolled-up holiday pay to administer holiday entitlement and pay in one administrative process.
The visibility of holiday pay on the payslip can result in an increase or reduction in employee queries in this area.
HOW IS HOLIDAY PAY CURRENTLY DISPLAYED ON YOUR PAYSLIP?
FOR HOLIDAY YEARS STARTING ON OR AFTER 1 APRIL 2024, WHAT WILL YOU IMPLEMENT?
45%
16%
23% Allow entitlement to build in ‘bank’, and calculate pay when employee takes the leave using 52-week method
It is not displayed separately, it is included in salary
It is shown as a daily rate
51% Rolled-up holiday pay using 12.07% or alternative % calculation
41%
25%
It is shown as a ‘top up’ on basic rate
It is shown as an hourly rate
25% A combination based on clients preference
14%
Other
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In most cases percentages have been rounded to two decimal places for clarity and may not add up to 100%. Graphics may have been rounded to whole percentages.
SPONSORED BY
Financial wellbeing Responses to this question vary greatly, there are those that feel the payroll department are assisting with financial wellbeing by paying people correctly and on time. A common response is that it should sit within the responsibilities of HR. Most of the comments contain concerns that payroll professionals are in no way trained to offer support with a person’s financial wellbeing and that they are not regulated to offer advice.
Time and costs are always at the forefront of any business decision, and providing financial wellbeing solutions is no exception with lack of time totalling 41.89% and cost at 34.32% .
Other comments are inline with earlier findings, including: ● ‘not a responsibility of payroll / responsibility of other business area’ ● ‘lack of knowledge’ ● ‘not approved by owners, Directors or leadership teams’ ● ‘not been considered before’.
REASONS FOR NOT OFFERING PAYROLL-BASED FINANCIAL WELLBEING SOLUTIONS
SHOULD PAYROLL ASSIST WITH EMPLOYEE FINANCIAL WELLBEING
34% Cost
31% Limitations of the payroll software or system
42% Time
44% Yes
33% Unsure
11% Lack of ‘plug and play’ solutions available from payroll providers
18% Other (please specify)
25% Already offer all the payroll- based financial wellbeing solutions that we want to
22% No
VIEW YEAR-ON- YEAR DATA
0.5% selected ‘Other’
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In most cases percentages have been rounded to two decimal places for clarity and may not add up to 100%. Graphics may have been rounded to whole percentages.
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Support offered Salary sacrifice , shopping discounts and flexible working arrangements are proving the most popular options. The reoccurring comment to the other option is providing an employee assistance program (EAP).
FINANCIAL SUPPORT OPTIONS OFFERED
25%
42%
56%
28%
45%
65%
Salary sacrifice
Allowing more hybrid / remote working (e.g., to save on commuting costs)
Shopping & discount vouchers
Allowing employees to work in the office (e.g., to save on household bills)
Providing one-off bonuses
Financial education / guidance provided by another organisation
13%
18%
19%
14%
18%
21%
Cash savings schemes through payroll
Income protection & insurance
Childcare support
Providing inflationary or above rate salary increases
None of these
Referrals to free debt advice services
6%
8%
9%
8%
8%
10%
Financial coaching
MoneyHelper financial education / guidance
Earned wage access provided by a signatory of the EWA Code of Practice
Share ownership schemes
Income maximisation tools, e.g., benefits calculators
Subsidised employer loans
1%
5%
5%
6%
Debt consolidation loans repaid through payroll deduction
Stocks & Shares or investment ISA through payroll deductions
Other (please specify)
Paying household bills
28
In most cases percentages have been rounded to two decimal places for clarity and may not add up to 100%. Graphics may have been rounded to whole percentages.
SPONSORED BY
Communication Previously identified concerns about payroll professionals not being able to provide financial advice could be the reason why 36.36% of respondents indicate that none of the answers apply to them. The most utilised methods of communication are through generic communication campaigns and during new starters inductions.
36%
None of these
36%
Generically through periodic communications campaigns
31%
At induction for new starters
17%
When employee benefits on offer change
14%
Dedicated financial wellbeing days
13%
When tax codes or National Insurance contribution rates change
8%
When colleagues take extended sick leave due to mental or physical illness
7%
When colleagues change working hours or patterns
7%
When colleagues take/share parental leave
7%
When colleagues return to work after a period of extended sick leave
6%
Information added to payslips
6%
When colleagues start transitioning into retirement from the age of Pension Freedoms
6%
When colleagues return to work after parental leave
6%
When colleagues receive a pay rise or promotion
5%
Other (please specify)
5%
When colleagues become subject to third-party deductions from salary
2%
When colleagues reach the age of 50/55, eg referral to MoneyHelper’s Midlife MOT
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In most cases percentages have been rounded to two decimal places for clarity and may not add up to 100%. Graphics may have been rounded to whole percentages.
SPONSORED BY
The findings in this year’s survey give us a valuable anchor point in understanding more fully how payroll professionals are supporting workplace financial wellbeing. As a profession, they play a critical role in enabling workplace financial wellbeing, wrapping financial education and guidance around various financial products and payroll deductions. Despite workplace financial wellbeing becoming more established each passing year, challenges persist as employers of all sizes and from all sectors put in place plans that meet the needs of their employees. We look forward to continuing our collaboration with the CIPP and payroll professionals as we drive this agenda forward to enhance the financial wellbeing of the UK workforce.
Michael Royce Policy Lead for workplace financial wellbeing, Money and Pensions Service
SUPPORTING FINANCIAL WELLING
30
SPONSORED BY
PAYROLL TEAM TYPE
CORE DEMOGRAPHICS
vs
23%
77%
An in-house payroll team
A payroll as a service team (outsourced / bureau)
WHERE IS YOUR BUSINESS BASED?
18% United Kingdom and overseas
4% Scotland
1% Northern Ireland
10% Throughout the UK
1% Overseas only
2% Wales
64% England
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In most cases percentages have been rounded to two decimal places for clarity and may not add up to 100%. Graphics may have been rounded to whole percentages.
SPONSORED BY
BUSINESS SECTOR
Payroll Bureau / Outsourcer
Financial services
14.40% Accountancy
13.42% Manufacturing
12.84%
10.12%
9.73% Education
9.34%
Retail
Entertainment / Hospitality
Other (please specify)
8.95% Healthcare
8.37% Care facilities
7.78%
7.78%
7.39%
7.00% IT
Construction
6.03% Catering
5.64% Consultancy
5.25% Engineering
5.06% Childcare
5.06% Transport
4.86% Cleaning
Voluntary / Charity
Housing / Landlords
4.86% Insurance
4.86%
4.67%
4.47% Building
4.47% Recruitment
4.28%
Agriculture
Payroll / HR software provider
Local Government
4.28% Legal
4.28% Logistics
4.28%
3.89%
3.89% Leisure
3.89%
Arts
Payroll / HR bureau and software provider
Property e.g. estate agents / developers etc.
Public Sector e.g. Police, Fire, Civil Service etc
Public Sector e.g. Police, Fire, Civil Service etc
Brewery / Beverages
3.89%
3.89%
3.50% Book-keeping
3.50%
3.50%
3.31%
Domestic ervices
3.11% Haulage
2.92% Distribution
2.92%
2.92%
2.72% Media
2.53% Security
Utilities
Religious organisations
2.33% Pharmaceutical
2.33%
2.14%
2.14% Wholesalers
1.95% Publishing
1.75% Advertising
Banking
Tools and equipment hire
1.75% Aviation
1.75% Telcom
1.75%
1.36%
1.36% Printing services
1.17% Offshore e.g. oil
Pension Provider
0.97% Chemical /
Private member club
0.97%
0.97%
0.78% Shipping / Port
0.58% Agrochemicals
0.58% Marina Industry
Railways
Petrochemical
0.58% Ministry of Defence
Outsourcer not payroll services
Mining / Quarrying
0.58%
0.39%
Please note: bureau respondants may have selected multiple business sectors
32
APPENDICES - YEAR-ON-YEAR DATA
NUMBER OF EMPLOYEES PAID
33
NUMBER OF PAYROLLS PROCESSES
34
In most cases percentages have been rounded to two decimal places for clarity and may not add up to 100%. Graphics may have been rounded to whole percentages.
PAY FREQUENCIES
35
In most cases percentages have been rounded to two decimal places for clarity and may not add up to 100%. Graphics may have been rounded to whole percentages.
WEEKLY PAYROLL PAY DAYS
36
In most cases percentages have been rounded to two decimal places for clarity and may not add up to 100%. Graphics may have been rounded to whole percentages.
FORTNIGHTLY PAYROLL PAY DAYS
37
In most cases percentages have been rounded to two decimal places for clarity and may not add up to 100%. Graphics may have been rounded to whole percentages.
4-WEEKLY PAYROLL PAY DAYS
38
In most cases percentages have been rounded to two decimal places for clarity and may not add up to 100%. Graphics may have been rounded to whole percentages.
MONTHLY PAYROLL PAY DATE
39
In most cases percentages have been rounded to two decimal places for clarity and may not add up to 100%. Graphics may have been rounded to whole percentages.
REQUEST TO CHANGE PAY FREQUENCY
40
In most cases percentages have been rounded to two decimal places for clarity and may not add up to 100%. Graphics may have been rounded to whole percentages.
REASON FOR CHANGE TO PAY FREQUENCY
41
In most cases percentages have been rounded to two decimal places for clarity and may not add up to 100%. Graphics may have been rounded to whole percentages.
PAY METHODS
42
In most cases percentages have been rounded to two decimal places for clarity and may not add up to 100%. Graphics may have been rounded to whole percentages.
PROVISION OF AD-HOC PAYMENT TO EMPLOYEES BETWEEN PAY DAYS
43
In most cases percentages have been rounded to two decimal places for clarity and may not add up to 100%. Graphics may have been rounded to whole percentages.
FPS SUBMISSION FOR EARLY PAY DAYS
44
In most cases percentages have been rounded to two decimal places for clarity and may not add up to 100%. Graphics may have been rounded to whole percentages.
PAY AND DEDUCTION ELEMENT PAYSLIP BREAKDOWN
45
In most cases percentages have been rounded to two decimal places for clarity and may not add up to 100%. Graphics may have been rounded to whole percentages.
TOOLS USED TO HELP EMPLOYEES UNDERSTAND THEIR PAY
46
In most cases percentages have been rounded to two decimal places for clarity and may not add up to 100%. Graphics may have been rounded to whole percentages.
MOST FREQUENT PAYROLL QUERY
47
In most cases percentages have been rounded to two decimal places for clarity and may not add up to 100%. Graphics may have been rounded to whole percentages.
DO YOU USE THE PAYSLIP TO COMMUNICATE OTHER EMPLOYEE MESSAGES
48
In most cases percentages have been rounded to two decimal places for clarity and may not add up to 100%. Graphics may have been rounded to whole percentages.
PAYSLIP DISTRIBUTION METHODS
49
In most cases percentages have been rounded to two decimal places for clarity and may not add up to 100%. Graphics may have been rounded to whole percentages.
HOW DO YOU PROTECT PAYSLIP INFORMATION DURING THE DISTRIBUTION PROCESS
50
In most cases percentages have been rounded to two decimal places for clarity and may not add up to 100%. Graphics may have been rounded to whole percentages.
RETAINING PAYROLL RECORDS
51
In most cases percentages have been rounded to two decimal places for clarity and may not add up to 100%. Graphics may have been rounded to whole percentages.
HOW DO YOU STORE PAYROLL RECORDS
52
In most cases percentages have been rounded to two decimal places for clarity and may not add up to 100%. Graphics may have been rounded to whole percentages.
HOLIDAY PAY REFERENCE PERIODS
53
In most cases percentages have been rounded to two decimal places for clarity and may not add up to 100%. Graphics may have been rounded to whole percentages.
ASSISTING FINANCIAL WELLBEING
54
In most cases percentages have been rounded to two decimal places for clarity and may not add up to 100%. Graphics may have been rounded to whole percentages.
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