Is payroll the Cinderella of the people management world? It is seen as an essentially administrative role: people being tasked with making sure employees are paid correctly, and answering queries related to this, rather than being the source of new thinking or innovation.
Perhaps this has been the case in the past, but now it seems that payroll work is a combination of increased compliance responsibility and technology. Strategic thinking is enabling payroll professionals to take a step out of the shadows and assume a more leading role in the organisations they serve.
Priscilla Williams, administration and payroll manager at tech unicorn PayFit, enthuses about her job for the variety of challenges it brings her on a near-daily basis. Engaging with legal changes and concentrating on delivering a smooth payroll experience, she’s proactively targeting efficiency – process optimisation that delivers benefits across the business. Her position, she says, means she works across different teams in the company, offering a business perspective while also having a direct impact on employees.
“What I bring to the company, over and above my payroll expertise, is a way of working that combines high standards, pedagogy, care and a global vision,” she says. “Payroll is a subject where you have to be square and precise, but that doesn’t mean you have to be rigid. I like to strike a balance between fluidity and pragmatism.”
Read more: The future of payroll
Williams describes payroll as a strategic function that directly affects employee confidence, corporate compliance and operational efficiency. For this reason, payroll can take its place in creating a broader vision for servicing employees, managers and the company’s overall strategy.
Not that simply getting the figures right doesn’t come with its own sense of satisfaction: “The most rewarding aspect of working in payroll is the knowledge that I am directly contributing to the wellbeing and the financial security of employees,” says Alan Clark, payroll manager at Meridian Business Support. “This motivates me to tackle payroll tasks each day, ensuring everyone receives their pay accurately and on time. By minimising errors, payroll helps avoid costly fines and legal issues while contributing to employee retention by ensuring salaries, benefits and bonuses are processed correctly,” he says.
Payroll goes further then – the job isn’t just about how finance impacts on the business, but how it impacts on people as well: “You experience so much when speaking to the employees that you pay, from the starting of families, promotions, to the other end of the spectrum, redundancies, and unfortunately, death,” says Samantha O’Sullivan, policy and advisory lead at the Chartered Institute of Payroll Professionals (CIPP).
“Payroll plays with people’s livelihoods. It enables employees to put food on the tables, a roof over their family’s heads, save into a pension for their future and provides a support system when people are too unwell to go to work.”
There has, then, been some evolution – if not a small revolution – in the function. “I’ve spent nearly a decade in payroll and the transformation has been incredible,” says Adam Coyle, payroll and implementations manager at Employment Hero. “I started when everything was done manually – spreadsheets, calculators and plenty of careful checking to make sure every number was right.”
Coyle now describes a workplace that includes the use of AI to deliver levels of accuracy and efficiency that were previously difficult to achieve. “Payroll isn’t just about processing pay anymore,” he says, “it’s a key part of the business strategy. Payroll data now provides valuable insights that help with workforce planning, budgeting and cost optimisation.”
Payroll is therefore no longer a back-office function but a strategic partner that helps businesses make informed decisions and achieve organisational goals. “The impact of payroll goes far beyond pay runs,” says Coyle, “it touches every part of the organisation, from the CEO to the newest hire. And that’s what makes this role so rewarding – knowing that the work we do directly supports the business at every level.”
John Pearce, chief customer officer for the payroll software provider CloudPay, agrees that the evolution of payroll has made the profession even more attractive: “Payroll offers the potential for an engaging, challenging and ultimately rewarding career, particularly for those with an eye for detail and accuracy,” he says.
Historically Pearce agrees payroll was a transactional, process-driven function. He puts its transition down to the rise of the ‘three As’: AI, automation and APIs. These technologies have enabled pay specialists to offer a wider range of services to their businesses.
Pearce highlights that the service payroll offers can now be key to attracting and retaining staff. ”Today’s employees are more aware of the potential for a ‘consumerised’ experience from their employer,” he says. “Increasingly, this has been built into how they get paid – not just how much money they receive.
“The need for flexibility and greater control means that workers – both permanent and seasonal or interim – want a modernised, high-performance payroll experience. In a world where employers are still struggling with skills shortages, the ability to offer a wider range of perks and benefits as an employer of choice can be the catalyst for attraction and retention,” adds Pearce.
Read more: Payroll errors impact 25% of UK employees
Kathryn Smith, principal product manager for payroll, at HR software firm MHR, says that payroll can deliver great value for organisations, but notes that businesses must invest in the function for that impact to be realised. “Given the opportunity, the payroll function can now provide real-time insights into costs, workforce productivity, and financial planning,” Smith says. “This means that payroll isn’t just about processing salaries, it’s about delivering critical data that supports decision making at the highest level.
“However,” she continues, “to unlock the full potential of payroll, organisations need to provide payroll professionals with the right tools and support. Our research has found that payroll teams highlight challenges such as a lack of clear vision from leadership, and funding constraints. These two areas are limiting their ability to be high-performing.”
Investment may be one part of unleashing the value of payroll, but there needs to be a change of attitude toward the function too: “My one ask for all employers out there, is to invite payroll to future planning meetings,” says the CIPP’s Samantha O’Sullivan. “Always keep us in the loop, because, if what you’re planning is eventually going to impact the way your employees are paid, or in fact the pay or benefits they receive, payroll need to be the first to know; not the last.”
Challenges for payroll – rules and regulations
Tax and national insurance changes
The government is making a series of changes around tax and national insurance. From April 2025, all UK employees will pay 15% on earnings above £5,000. This is the result of changes to the threshold at which the rate is paid.
National minimum and living wage
Again, as from April 2025 these rates of pay will increase. Payroll not only needs to implement these changes but may be involved in mitigating the impact of the rise in cost.
Employee benefits
As from April 2026, employee benefits in kind need to be accounted for through the employer’s payroll, with income tax paid in real time on the monetary value of these benefits.
Umbrella compliance/contractors
Governments rarely leave contractor legislation alone, and rarely make it any more straightforward. Government proposals mean that, as from April 2026, the end client – if they are engaging with an umbrella company – or the recruitment agency closest to the end client, will be responsible for PAYE/NIC non-compliance. This will undoubtedly bring more compliance responsibility to payroll, where these employment models are used.
This article was published in the March/April 2025 edition of HR magazine.
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