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.
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