Payroll trends and future priorities 

The Chartered Institute of Payroll Professionals’ (CIPP) Payslip Statistics Survey is one of the institutes key pieces of research, exploring trends impacting payroll processes, payslips and compliance. 

The CIPP’s policy and research team are responsible for gathering the valued data from payroll professionals. As with any CIPP research, respondent’s contributions are crucial to allow the policy team to better represent the payroll profession and lobby for change at government level.

 
Since it’s conception in 2008, the survey continues to grow in popularity, with the number of responses increasing each year. This year’s response rate was up by 22% compared to 2023. The policy team hope this trend continues, and plan to promote the survey far and wide. The more professionals that take part, the more useful the data becomes. 

The 2024 survey was open for six weeks from 5 February to 15 March 2024, and consisted of the staple bank of questions asked annually to compare the year-on-year data. A few topical questions were added to determine relevant practices in payroll and track changing trends. 

This year’s survey included two questions provided by the Money and Pensions Service (MaPS), to investigate how payroll professionals are supporting employee’s financial wellbeing. MaPS contributing to the Payslip Statistics Survey, aligns with their UK Strategy for Financial Wellbeing, the ten-year framework launched in 2020, with the vision of everyone making the most of their money and pensions. 

Payslip Statistics Report

The policy team produce the Payslip Statistics Report which analyses the Payslip Statistics Survey to determine the latest trends in payslips, pay frequencies, payment methods and distribution. 

The report emphasises the importance of payroll data for employee financial wellbeing and organisational success. It discusses the underutilisation of pay data, the benefits of digital payslip solutions, and the role of payroll professionals in driving change. 

Core demographics 

This year’s respondents primarily work in an in-house payroll setting in England. 

Only 23% of respondents are part of a payroll service team (outsourced / bureau) compared to 77% from an in-house payroll team. 

Business locations: 

• 64% - England 
• 18% - UK and overseas
• 10% - throughout the UK 
•  4%  - Scotland 
•  2%  - Wales
•  1%  - Northern Ireland
•  1%  - Overseas only

Key findings

• Monthly pay remains the most common pay frequency with 96.60% operating a monthly payroll 
  
  
• Friday remains the most popular pay day for weekly, fortnightly and 4-weekly payrolls
  
  
• The most common pay day continues to be the last working day of the month 
  
  
• Bacs payments continue to dominate payments for payroll 
  
  
• Compliance around full payment submission (FPS) for pay day reporting has increased by 
  more than 10% 
  
  
• Compliance with the Employment Right Act’s (ERA) right to an itemised pay statement 
  has increased slightly, now reaching 91.16% 
  
  
• 57.57% of respondents don’t use any tools to help employees understand their payslip 
  
  
• Printed payslips continue to drop, falling by 8.39% this year 
  
  
• The retention of payroll records for six years plus the current tax year has grown by 
  26.49% 
  
  
• The number of payroll professionals that store all payroll records electronically is still 
  increasing, with a further rise of 8.57% 
  
  
• Compliance on holiday pay reference periods fell by 6.84% 
  
  
• 51.12% of respondents plan to use rolled up holiday pay for part-year and irregular hours 
  workers. 

What do the results mean for the CIPP policy team? 

The vision and purpose of the CIPP is to be at the forefront of leading the future of payroll professionals, by supporting and developing skills and knowledge of members and the wider payroll community. 

Consequently, the following subjects have been identified as the key areas that require further support and education: 

• FPS submission date 
  
  
• Most frequent payroll query – tax code applied and understanding payslip
   
• Holiday pay compliance 
  
  
• Financial wellbeing 

FPS submission dates for early payments 

The 2023 report identified that only 57.92% of respondents were compliant with reporting the correct pay date. Reporting the incorrect date, can impact those claiming universal credit and potentially leave an employee in financial hardship. 

Over the last 12 months the CIPP has produced regular communications throughout the year to promote awareness and help improve accuracy. 

This year’s results show a 10.70% increase in compliance with 68.62% of respondents reporting the contractual pay date on the FPS submission. Although it’s a step in the right direction, there is still a need to raise awareness of the correct procedure. 

Frequent payroll queries 

An unfortunate fact is the most frequent payroll query will always relate to a payment error due to late data submissions, or in fact no information received at all. 

However, two common payroll queries that can be reduced are: 

• Understanding their pay / payslip 
  
  
• Tax code applied. 

At a time when personal finances are at the forefront of the mind for most UK residents, it’s more important than ever that everyone should understand their payslip and can check they are being paid correctly. 

Unfortunately, this is rarely the case. Payroll professionals often try to communicate upcoming changes in legislation or if something new is rolled out, but the fact of the matter remains that a large number of working people in the UK still don’t understand the basics of the payslip, and many are too embarrassed to ask for help. 

The CIPP understand the importance of understanding your payslip and will continue to promote ways in which everyone can have a better understanding. As part of this initiative, the CIPP has produced a completely free interactive ‘understanding your payslip’ tool, which cuts the jargon that can baffle people looking at their payslips. 

Despite the fact that payroll professionals are only responsible for implementing a tax code and not the calculation and allocation of the code, 25% of respondents have indicated that tax code queries are the most common issue. 

HM Revenue and Customs (HMRC) are currently promoting their personal tax app, where employees can find their personal details, including national insurance number and details of their tax code. There is also a range of ways to find information and submit any changes to personal circumstances. 

Encouraging employees to refer to the HMRC app could not only help employees to better understand their personal tax position but also greatly reduce the volume of queries into the payroll department in the long term. Surely a win for everyone. 

Holiday pay compliance 

Holiday pay continues to be a contentious, complicated admin burden for payroll professionals. The report indicates the main cause of confusion is that holiday pay and holiday entitlement are two separate parts of the puzzle, each with different calculation methods, which is creating the risk of errors and non-compliance. 

This year’s results show a 6.84% decline in respondents that are calculating holiday pay as instructed by government guidance. However, calculations included in ‘other calculation method’ responses may achieve a compliant result. 

There is no doubt that holiday pay and entitlement will continue to be hot topic for quite some time. The CIPP offers training courses on holiday pay, so if you’re in need of a refresh following the changes in legislation in early 2024, take a look at our website today 

Financial wellbeing 

Support for financial wellbeing in the workplace continues to evolve in many ways, and although there has been more awareness, financial education and guidance than ever before, there are still challenges ahead. 

This year’s results show an increase in the number of respondents that think payroll is well placed to assist with the financial wellbeing of employees. However, in contradiction only 36.36% of respondents indicated that they communicate with employees / clients employees about staying on top of money and pension matters or improving their financial wellbeing. 

The CIPP look forward to working in partnership with MaPS moving forward, supporting their programme to improve the financial wellbeing of the UK workforce. 

The CIPP policy team are delighted they have the opportunity to produce this report every year and gain vital insight into the areas that would benefit from further support. It provides insight into areas for improvement, upskilling and education, ensuring the payroll profession are remaining compliant in their day to day activities. 

Read the Payslip Statistics Report in full, as well as other research and reports conducted by the policy team, to see how your business stacks up against our respondents. Keep an eye out for future research and have your say, the more responses we receive the more accurate our data can represent the payroll profession across the country. It really is appreciated and goes a small way to bolstering how the country sees the critical function of payroll.