This report looks at data collected from in-house payroll teams
PAY PROFESSIONAL
OUTSOURCED
IN-HOUSE PAYR LL INSIGHTS SURV Y REPORT 2026
This report looks at data collected from in-house payroll teams
THINK PAY THINK CIPP
Part of the CIPP Payroll Insight Survey Report series including Outsourced and Pay Professional. See page 13 for links to the other reports.
PAYROLL INSIGHTS SURVEY 2026 IN-HOUSE
FOREWORD Welcome to the Payroll Insights Report 2026. This report looks at data collected from in- house payroll teams. Thank you to all who responded, and I hope this report provides some valuable insights into how such teams are operated. The results can be used for benchmarking and helping organisations to review payroll operations and identify opportunities for improvement or highlighting where you are excelling. Please share this report with other pay professionals, colleagues and peers. It is important that we raise the profile of payroll as a profession and showcase the important work carried out by pay professionals across the UK.
CIPP Policy and Research Team
Contents
4 4 5 6 6 7 7 8 8 9
Number of pay professionals in an organisation
Working arrangements Qualification requirements
Third party or outsourced providers
Pay frequencies Payslip access Payment methods Benefits offered Benefit processing Statutory payments Pension processing
10 11 11 12
Overpayments Payroll queries Top challenges
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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.
PAYROLL INSIGHTS SURVEY 2026 IN-HOUSE
The median of payrolls per pay professional is 1, with 400 employees per pay professional showing that most in-house teams focus on one payroll with a high number of employees within the business. This is 7% higher than last year showing in-house teams workloads are increasing 1/400
94%
33%
of businesses prefer that candidates have a CIPP-approved qualification, up 32% from 25% last year
use Bacs to process payments to employees
KEY TAKEAWAYS
75% of respondents use salary sacrifice pensions, this remains the dominant pension arrangement despite upcoming National Insurance changes 75% SALARY SACRIFICE PENSIONS
HYBRID 68%
of respondents still using P11Ds in some capacity
Most in-house teams process predominantly monthly payrolls (97%) MOSTLY MONTHLY
in 2029 and increasing National Minimum Wage considerations
77% of in-house teams opt to use a hybrid working arrangement
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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.
PAYROLL INSIGHTS SURVEY 2026 IN-HOUSE
RESULTS
Working arrangements
Number of pay professionals in an organisation
What working arrangements do you operate for the staff in your organisation?
The median number of employees per pay professional is 400, a 7% increase on the previous year. This suggests payroll teams are continuing to absorb additional workload despite ongoing legislative complexity and reporting obligations. In-house payroll teams average at four team members, this does not consider the complexity of the payrolls, as specialised teams may require more resources.
26% OFFICE- BASED
15% REMOTE
77% HYBRID
1
3
Payroll per pay professional
MEDIAN
AVERAGE
1% OFFSHORE
1% OTHER
400 MEDIAN
509 AVERAGE
Employees per pay professional
Hybrid working remains by far the most popular option, with more than three-quarters of respondents choosing this arrangement. The balance between office-based and home working also remains remarkably even, with respondents spending an average of around 2.5 days per week in each location. Hybrid working remains the dominant model across all surveys, suggesting that employers continue to view payroll as particularly well suited to flexible working. arrangements.
400 MEDIAN
988 AVERAGE
Payslips (monthly) per pay professional
4
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.
PAYROLL INSIGHTS SURVEY 2026 IN-HOUSE
Qualification requirements
Minimum education levels have increased to 47%, up from 42% from the previous year. A third of employers now actively prefer candidates holding a CIPP- approved qualification. Combined with rising minimum qualification requirements, the results suggest increasing professionalism of the payroll function.
Take a look at our Pay Professional Report to see what qualifications pay professionals hold.
Do you have any qualification requirements for new payroll staff members?
Minimum education levels 47%
Prefer CIPP-approved qualification (e.g. Payroll Technician Certificate, Foundation Degree) 33%
22%
7%
No requirements or preferences
Require CIPP-approved qualification (e.g. Payroll Technician Certificate, Foundation Degree)
5%
Prefer other industry qualification 4%
2%
Other (please specify)
Require other industry qualification
5
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.
PAYROLL INSIGHTS SURVEY 2026 IN-HOUSE
Third party or outsourced providers
Pay frequencies
Though many employers choose to pay multiple pay frequencies, the top pay frequency used is monthly and continues to dominate at 97% , similarly to previous year’s results. This suggests that the majority of in-house payroll teams operate within stable and predictable payroll environments. The second is the weekly pay frequency at 19% . All 'Other' responses mentioned stated they used a quarterly pay frequency.
Do you engage with any third party or outsourced providers?
Which of the following payroll frequencies do you operate and what is your cut off for changes?
97% MONTHLY
WEEKLY
FOUR-WEEKLY
19% 6%
40% YES
60% NO
- CUT OFF -
- CUT OFF -
- CUT OFF -
7 DAYS 3 DAYS 6 DAYS
ANNUAL
OTHER
FORTNIGHTLY
6% 3% 2%
Although most in-house payroll teams do not use a third-party provider for all or part of their payroll process, those that do tend to adopt a targeted approach to outsourcing rather than outsourcing payroll operations in their entirety. Employers are most likely to seek external support for specialist activities such as international payrolls, pensions, benefits administration, share schemes and payment processing. Payroll software providers were the most commonly used external resource, helping organisations with payroll processing and administrative tasks, while payroll bureaus and umbrella companies were also frequently used to support specific areas of payroll delivery.
- CUT OFF - 3 DAYS
- CUT OFF -
- CUT OFF -
14 DAYS 14 DAYS
What are the top 5 pay dates for monthly payrolls? ● 25th (28%) ● Last working day of the month (27%) ● 28th (22%) ● 15th (11%) ● 20th (7%)
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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.
PAYROLL INSIGHTS SURVEY 2026 IN-HOUSE
Payslip access Electronic payslips accessed through an online portal remains a highly popular way to distribute payslips. It’s both accessible for both employers and employees. This is convenient as typically it can mean less administrative work is needed and most importantly, it’s compliant following the General Data Protection Regulation rule requirements, such as being password protected. Payment methods Bacs remains at centre stage sitting comfortably at 94% of respondents saying it’s their standard payment method used to make payments to their employees. It is a little more cost- effective than its main competitor, faster payments, which sit at around 11% Faster payments, which sits at around 11%. In addition, CHAPS payments sit at a low 2%, and wire payments at 1%, though we still have one respondent that uses cheque, which equals >1%. ‘Others’ typically use an external method of payment, so are not involved with the process.
WHAT’S ON A PAYSLIP?
EARNINGS AND DEDUCTION
EMPLOYEE
DATE
Sarah Payroll Services
Salary Sarah
25-08-26
EMPLOYEE DETAILS
Name
99% Pay as you earn (PAYE)
57% 20% 49% 96% 93% 98% 86% 49%
Home address
77% Work address
Bank details – all information Bank details – partial information
8% Pay point (department / location)
9% Payroll number 1% Payment date
Bank details – if requested
Date of birth
8% Tax code
National Insurance number - full National Insurance number - partial
92% National Insurance category
3% Payslip messaging
EARNINGS AND DEDUCTION
LEGAL REQUIREMENT
OTHER ITEMS MENTIONED
Basic pay
98% Pay period dates 98% Hours worked
EE’s National Insurance EE’s pension deduction ER’s National Insurance ER’s pension deduction
98% Tax period
75% Salary sacrifice schemes 87% Year to date (YTD) figures 46% Loan and savings balances
Expenses paid
Holiday pay separate (rolled up)
32% Employer name
Holiday pay separate (using allowance)
29% 89% 69%
£
Overtime pay separate
Payment method
£
7
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.
PAYROLL INSIGHTS SURVEY 2026 IN-HOUSE
Benefits offered
Benefit processing
With the mandatory payrolling of benefits in kind (BiKs), it's essential to know which benefits are provided. And to have up to date and compliant processes to handle them.
The proportion of employers payrolling BiKs has increased from 46% to 55% in a single year, suggesting many organisations are actively preparing for the introduction of mandatory payrolling in April 2027. Despite mandatory payrolling approaching, more than two-thirds of employers still rely on P11Ds in some capacity, highlighting the scale of change still to come.
Most common benefits
78% 77%
Private healthcare
Cycle to work
63%
Death in service
How do you currently process benefits?
61%
Company car / van
56%
Car allowance
52%
Employee assistance programmes
50%
Lifestyle benefits (vouchers / discounts portal)
36% P11D process only
32% Mix of P11D and payrolling
45%
Buy / sell holiday Income protection Private dental care
35%
30%
Other benefits mentioned
25%
Loans
24% 22%
Share schemes
● Financial wellbeing support ● Yoga classes ● Additional pension contributions ● Enhanced parental leave ● Life insurance ● Travel insurance ● Will writing. Financial wellbeing support, enhanced parental leave and employee assistance programmes continue to demonstrate the widening role benefits play in employee attraction and retention.
Gym membership
18%
Workplace childcare
8% No reportable benefits
23% Payrolling only
13%
Saving schemes
9%
Living accommodation
7% 5%
Electronic devices for personal use
Other (please specify) Electric car scheme
4% Health cash plan 2% Salary sacrifice car scheme 2% Critical illness insurance 2%
8
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.
PAYROLL INSIGHTS SURVEY 2026 IN-HOUSE
Statutory payments
How do you processes occupation payments above and beyond statutory entitlements?
Partial pay Above statutory
Full pay Reducing during duration
Full pay Partial duration
Full pay Full duration
Statutory only
Neonatal pay, Shared Parental Leave and Parental Bereavement pay are the most likely to be paid at the statutory rate, nearly half of the respondents agreed. This is possibly due to their irregular occurrence and the company's need to prioritise the changes made by the Employment Rights Act 2025 or other factors. Paternity remains for another year the highest most likely to be paid full pay for the entire 2-week duration, though a similar percentage stated that they pay this at the statutory rate only. There seems to be higher percentages across the board for full pay for a partial duration of the statutory leave, this could indicate a balance is being struck between wanting to pay employees a higher rate and managing employment costs that so many of our CIPP members have been reporting. Employers appear increasingly focussed on balancing employee support with affordability, with enhanced pay for part of a statutory leave period becoming more common than full enhancement for the entire duration.
SICK PAY
SHARED PARENTAL PAY
PARENTAL BEREAVEMENT PAY
PATERNITY PAY
EMPLOYERS ARE INCREASINGLY ENHANCING PAY FOR ONLY PART OF STATUTORY LEAVE, BALANCING EMPLOYEE SUPPORT WITH RISING COST PRESSURES.
NEONATAL PAY
MATERNITY PAY
ADOPTION 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.
PAYROLL INSIGHTS SURVEY 2026 IN-HOUSE
Pension processing
Salary sacrifice is by far the most prevalent method for pension contribution deductions. However, increases to the National Minimum Wage (NMW) and the National Living Wage (NLW) have seen more people being paid at, or just above, these rates and therefore, to avoid becoming non-compliant, many people are not able to utilise salary sacrifice pension arrangements. There has also been the announcement that salary sacrifice will be capped for National Insurance saving from 2029. It therefore makes sense that we see a small increase in the use of net pay arrangement and relief at source pension arrangements than previous years.
40% 49% 75%
Our research also shows the average contribution percentages for both employees and employers are as follows:
NET PAY ARRANGEMENTS
RELIEF AT SOURCE
SALARY SACRIFICE
4% 7% Employee contribution
Employer contribution
70% of employers offered more than the statutory minimum contribution of 3%, showing that increased pension contributions is being used as an employee incentive.
Key Performance Indicators (KPIs)
Payrolls being completed on time is the most used KPI at 82% , with payroll errors that impact the employee being a close second ( 67% ). Queries resolved is also commonly used ( 45% ). 7% of respondents don’t use any KPIs at all, but this means that 93% of respondents use at least one formal KPI to monitor payroll performance.
Payroll completed on time 82%
Payroll errors after payment / worker impacted 67%
Queries resolved 45%
Other KPIs our respondents mentioned included:
● Response time ● Number of payslips ● Fraud attempts.
Other 3%
None 7%
Payroll errors before payment / no worker impacted 39%
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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.
PAYROLL INSIGHTS SURVEY 2026 IN-HOUSE
Payroll queries
Overpayments
What is your most frequent payroll-related query?
Just over half of respondents stated that they review on a case-by-case basis before proceeding to chase an overpayment from an employee. Only 40% said that all overpayments are chased. When asked about what monetary threshold they used before proceeding to chase, responses varied from £50 to £500. By comparison, when asked if there is a time limit used with regards to chase overpayments, again the majority (69%) of respondents said this would be conducted on a case-by-case basis, followed by 27% saying that all overpayments were chased regardless of a time limit, whilst others gave varying time frames between seven weeks to three months. Some said there were no limits for active employees, whilst others put a limit on the number of contact attempts, presumably to limit the administrative burden. The results suggest most organisations do not operate a rigid overpayment recovery policy. Instead, monetary value, employee circumstances and the age of the debt appear to influence recovery decisions.
Underpayments (late data) 32%
16%
28%
Access to payslips
Tax code queries
Overpayments (late data) 3%
Support understanding payslips 15%
3%
Other
Do you have a monetary threshold for chasing overpayments?
1%
Underpayments (payroll error) 1%
Requesting payment advance 1%
40% All overpayments are chased
51% Reviewed on case-by-case basis
9% Yes or other
Non-payment
Top three payroll queries 1. Underpayment (late data received) (32%) 2. Tax code query (28%) 3. Access to payslips (16%)
Do you have a time limit for chasing overpayments before they are written off?
Two of the three most common payroll queries relate either to employee understanding of pay or the timely receipt of payroll information. This suggests that communication and data quality remain key drivers of payroll workload. Whether payroll is delivered in-house or through an outsourced provider, the most common employee queries relate to understanding pay, accessing payroll information and resolving issues caused by late or incomplete data. Improving employee self-service capabilities, payroll communication and data quality may therefore represent one of the largest opportunities to reduce avoidable payroll administration.
27% All overpayments are chased
4% Yes or other
69% Reviewed on case-by-case basis
11
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.
PAYROLL INSIGHTS SURVEY 2026 IN-HOUSE
Top challenges
Employment Rights Act 2026
National Minimum Wage record keeping National Minimum Wage increases Salary sacrifice National Living Wage increases
Benefits in kind
Compliance requirements Legislative changes
Holiday pay calculations
Employer National Insurance increases Rising employment costs Statutory Sick Pay day 1 rights and new rates Benefits complexity Fair Work Agency System inefficiencies Skills gaps Company restructuring Artificial intelligence’s impact on payroll Reporting issues Payroll consolidation Outdated systems and processes System integration between human resources and payroll New payroll system implementation Transition from P11D Mandating payrolling benefits Client cost resistance Maximising employee value Smaller teams Recruitment challenges Lack of resource Increased workload Economic uncertainty Automation / removal of manual processes Statutory payments Payroll operating costs Budget constraints Cost of living pressures Wage inflation Aging workforce Workforce growth Staff shortages
12
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.
PAYROLL INSIGHTS SURVEY 2026 IN-HOUSE
OUTSOURCED
IN-HOUSE
PAY PROFESSIONALS PAYR LL INSIGHTS SURV Y REPORT 2026
This report looks at data collected from pay professionals
CHECK OUT THE OTHER REPORTS This report is part of a series of three payroll benchmarking surveys, exploring in-house operations, outsourced services, and the role of pay professionals. Together, they provide a comprehensive view of the payroll landscape across the UK. To gain the full picture, please explore the other reports in this series by clicking the links to the right.
THINK PAY THINK CIPP
Part of the CIPP Payroll Insight Survey Report series including Outsourced and In-house. See page 14 for links to the other reports.
CLICK TO VIEW REPORT
IN-HOUSE
PAY PROFESSIONAL
OUTSOURCED PAYR LL INSIGHTS SURV Y REPORT 2026
This report looks at data collected from outsourced payroll teams
THINK PAY THINK CIPP
Part of the CIPP Payroll Insight Survey Report series including Pay Professional and In-house. See page 12 for links to the other reports.
CLICK TO VIEW REPORT
13
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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