COMPLIANCE
Payroll as a strategic partner Payroll is no longer just about processing wages. It’s becoming a strategic force within organisations, contributing to decisions around workforce planning, budgeting and employee engagement. Pay professionals are increasingly recognised for their expanding roles within organisations. Beyond traditional payroll duties, they now interpret trends in absence, turnover and pay equity, advise on legislative changes and global compliance and enhance transparency and trust in pay processes. This evolution is driving a shift in skills from transactional expertise to data literacy, tech fluency and strategic thinking. Enhanced cybersecurity and compliance As payroll systems now store vast amounts of sensitive data, cybersecurity has become a priority. Modern platforms offer features such as end-to-end encryption, multi- factor authentication and continuous monitoring with comprehensive audit trails to protect information. Alongside this, compliance is becoming more dynamic, with AI tools assisting in the real-time tracking and interpretation of changing tax laws, employment regulations and statutory entitlements. To conclude, 2025 was a year of recalibration for payroll teams, and 2026 promises to be even more transformative. With legislative reforms, rising costs and evolving employee expectations, pay professionals must stay informed, agile and proactive. Whether it’s updating systems, training teams or engaging with policy consultations, preparation is key. n
CIPP’s Future of Payroll Report 2024 (https://ow.ly/cX4V50XwLY0), 84% of payroll professionals believe AI will change the profession, yet only a small fraction currently use it. The challenge isn’t adoption alone, but also ethical implementation, with concerns around data privacy and transparency. Cloud-based and mobile payroll systems The shift toward remote and hybrid working has accelerated the adoption of cloud-based payroll platforms. These solutions provide real-time access to payroll data from any location, offer seamless integration with HR and finance systems and deliver enhanced scalability and flexibility to organisations. Mobile payroll apps and employee self-service portals are becoming standard, allowing staff to view payslips, update details and access earned wages before payday, boosting transparency and financial wellbeing.
will require fair distribution of tips via payroll, with transparency and regular reviews. This will demand system updates and policy changes. 4. Fire and rehire restrictions New rules will limit the use of fire and rehire tactics. Pay teams involved in restructurings must be prepared for more complex pay adjustments and documentation. 5. Union access and Tribunal timeframes Extended rights for union representatives and longer Tribunal claim windows (from three to six months) may increase the need for accurate payroll records and audit trails. Trends and technology: the future of payroll The payroll function is undergoing a transformation, driven by advances in technology, evolving workforce expectations and increasing regulatory complexity. What was once a back- office task is now emerging as a strategic business function, powered by automation, data analytics and artificial intelligence (AI). AI and automation: from routine to strategic AI and robotic process automation are reshaping payroll operations. Tasks like data entry, tax compliance, benefit calculations and fraud detection are increasingly handled by intelligent systems. This frees up pay professionals to focus on cost analysis, forecasting and compliance planning. According to the
Earned wage access (EWA) and flexible pay models
EWA is gaining traction, especially in sectors like retail and hospitality. It allows employees to access a portion of their wages before payday, helping reduce financial stress and improve retention, where offered alongside appropriate education. Payroll systems must now accommodate on-demand payments, multiple pay frequencies and customised deductions and benefits. This flexibility requires robust compliance controls and real-time data processing.
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| Professional in Payroll, Pensions and Reward |
Issue 116 | December 2025 - January 2026
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