What will payroll look like in 2025?

Unifying systems

We know that some of the biggest challenges faced by payroll professionals include collating data, correcting previous mistakes, and maintaining data security. If your payroll team are managing multiple processes across multiple platforms, there’s a risk of errors, duplicated efforts, and inaccurate payments.

In 2025, more and more organisations will leave these cumbersome systems in the past and instead opt for a unified payroll platform. Incorporating this technology will allow you to stay one step ahead of the curve and boost productivity in your organisation. It’s the most efficient and accurate solution, reducing administrative burden on your team and allowing them to focus on more strategic tasks.

Demand for real-time data

Real-time payroll platforms will become even more in-demand in 2025. They give employees up-to-date information on their salary, expenses and benefits. For some organisations, moving to real-time data will enable employees to access their pay sooner, which can help with financial wellbeing and boost employee satisfaction.

Real-time payroll will also be beneficial for organisations, allowing them to better manage their cashflow and ensure compliance by automatically incorporating updates to new tax regulations. This benefit is particularly important given that the new UK government may make amends to legislation that affects payroll in 2025, such as a rise in National Minimum Wage.

Payroll upskilling

Automation of payroll is a big benefit of digital transformation, but it’s important your payroll team doesn’t get left behind when adapting to new systems. In fact, 56% of payroll professionals feel they need new skills to take advantage of industry innovation. This is where upskilling comes in.

In order to retain your payroll employees, it’s important to invest in their learning and reassure them about their job security. They need to feel comfortable with the rate of change in payroll, and this involves upskilling them to keep up with new technologies.

Payroll professionals are also feeling a growing pressure to react more quickly and comply to the regulatory landscape. Changes to tax policies and employment law, like those announced in the Chancellor’s Budget, are undoubtedly affecting payroll professionals’ workload.

According to Kathryn Smith, Principal Product Manager at MHR, “payroll teams will need to remain agile and proactive, addressing and anticipating further legislative updates while ensuring accuracy and compliance amid these unknowns.” It’s clear that digital innovation and new legislation will rapidly change the payroll landscape in 2025, making it a dynamic function that is integral to wider business operations.

Final thoughts

If you want to future-proof your organisation, it’s time to embrace change instead of ignoring it. Looking ahead and implementing long-term plans will enable your employees to feel excited about the future of work. To get a full breakdown of all the changes coming to payroll in 2025, including automation and on-demand pay, download our free World of Work 2025 guide.