COMPLIANCE
Payroll in 2025: a year of challenge, change and courage
April 2026, proposed to be mandatory from 2027) ● introduce / enhance bereavement leave ● bring changes to zero-hours contracts and probationary periods ● introduce many additional ‘day 1’ rights for parental leave ● provide greater access to flexible working arrangements ● introduce a fair pay agreement for adult social care, which could result in a separate NMW rate ● strengthen tipping laws. While the Bill is still under debate, its potential impact has kept pay and HR professionals on high alert, particularly those working in organisations or sectors with variable pay structures. Real-time payroll: the new normal 2025 has seen a marked shift towards real-time payroll reporting. With HMRC and other regulators demanding more frequent and accurate data, employers “Take a breath, look back on what we’ve achieved, pat yourselves on the back and take the credit for another year delivered”
have invested in cloud-based payroll platforms, automated compliance tools and integrated HR and finance systems. The benefits are clear: fewer errors, faster processing and improved employee trust. But the transition hasn’t been easy, especially for organisations with legacy systems or complex pay arrangements. Global payroll: managing cross- border complexity For global employers, 2025 has brought continued challenges. Brexit-related issues, evolving European Union regulations and local legislative changes in countries like Ireland, Germany and Spain have required constant vigilance. Northern Ireland is introducing its own version of the ERB and other legislation already in place in the rest of the UK, but with slightly different rules. One to watch out for if you have employees based there. Payroll teams have had to become more globally aware, often working with legal and tax experts to ensure compliance across multiple jurisdictions. What’s next for payroll? Looking ahead to 2026 and beyond, several key trends are set to shape the future of payroll: ● the statutory parental leave review ● mandatory payrolling of BiKs from 2027: employers must act now to ensure systems and processes are ready
● deeper integration: expect tighter integration between payroll, HR and finance ● artificial intelligence and automation: it’ll reduce manual tasks but require new skills ● employee experience: payroll will play a central role in shaping the employee experience. A profession to be proud of 2025 has been a year of challenge, but also one of courage, collaboration and progress. Pay professionals have navigated legislative reform, embraced digital transformation and continued to deliver with accuracy and integrity. As we close the year, it’s worth celebrating the profession’s achievements, and looking ahead with confidence. The road to 2026 and beyond may be bumpy and demanding, but people working in pay are ready for the challenge. Take a breath, look back on what we’ve achieved, pat yourselves on the back and take the credit for another year delivered. The festive season is often one of the busiest and most stressful of the year for payroll, but you deserve to take credit for all you’ve achieved, often quietly, in the background, ensuring everyone gets paid accurately and on schedule. Celebrate that success. Look forward to the challenges of 2026 and beyond with positive thoughts and actions. We’re payroll, we can and will do this! n
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| Professional in Payroll, Pensions and Reward |
Issue 116 | December 2025 - January 2026
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