New Payroll Norms Emerge as Automation Drives Big Changes
First-time approval levels decreasing globally as demands for flexibility grow to meet changing workforce needs, reflected in supplemental impact increase
Automation and digitalisation become essential drivers to meet new payroll demands, leading to major changes in how data is processed
Calendar lengths continue to fluctuate regionally; APAC’s increase suggests a response to previously overly compressed timelines
ANDOVER, UK – 24 June 2025: The continued global pressure on payroll to remove rigid processes has created new efficiencies, facilitated in part by the drive to deploy the three As (AI, automation and APIs), which are evolving to meet new demands for flexibility. That’s according to the 2025 Payroll Efficiency Index (PEI), out today from CloudPay, the global leader in payroll and payments solutions.
The PEI report is an analysis of more than one million payslips processed from over 130 countries between 1 January and 31 December 2024. According to the report, global pay processes are adapting, demonstrating greater flexibility and nuance, which is supported by falling first-time approval (FTA) rates across the globe, dropping 1.21 percentage point year-on-year to 72.61% in 2024.
This is further evidenced by the increase in supplemental runs, [the proportion of payroll runs taking place outside of the normal cycle], which have risen 1.43 percentage points to 19%, and the fluctuations in global calendar lengths [the number of days it takes to complete a payroll cycle from start to finish], which have increased by almost 12%. Far from being a negative, this fall is indicative of a longer-term shift in how payroll processes are being managed globally to accommodate more flexibility and nuance.
The report also revealed a strong link between those countries that have more widely adopted digitalisation and improvements to data input issues (DII)* and issues per 1000 payslips* KPIs. While this data suggests a continued move to more flexible payroll solutions on a global scale, ongoing improvements in automation, APIs and AI will continue to support this evolving demand. The vast majority (94%) of the payroll, HR and finance leaders surveyed indicated that disconnected systems and solutions are a challenge.
UK showing improvements – but further enhancements are possible while strategically balancing flexibility needs
Despite a year-on-year uptick of 0.80%, the UK’s FTA rate has remained suppressed at 43.49%, keeping the country at the comparatively low-end of the global scale for efficiency measured by First Time Approvals. However, the report identified the UK as a market that is striking a strategic balance between technological advancement and human expertise in light of flexibility demands, which impact FTAs. This is further exacerbated by the increase in UK calendar length, which grew from a 5.51 to 6.25 days between 2023 and 2024.
Grant Tasker, Senior Director
of Global Payroll at CloudPay,
“A ‘new normal’ is emerging in payroll, in which flexibility and adaptability are increasingly common. This explains to some extent why core metrics appear to have fallen. The function has never before faced such significant demand to adapt and pivot so quickly. Flexible working models, evolving calendar lengths, workforce fluctuations and increased supplemental runs have made it imperative for payroll solutions to flex on a local, national and global scale. In many regards, while payroll has ultimately become less manual, it’s arguably now more nuanced.
“Countries seeing greatest improvements in efficiencies are those that have more widely adopted digital transformation, largely through automation. However, the fact that so many have revealed difficulties with disconnected solutions suggests that there are still improvements to be made which, encouragingly, will drive further payroll efficiencies if the trends in the latest report continue.”
*Note, calculations for data input issues and issues per 1000 payslips have been adjusted in the 2025 report in order to reflect CloudPay’s new automated measuring system, which enables real-time reporting and an overhaul of how issues are identified, tracked, and reported. As a result, yearly comparisons are unavailable.
About CloudPay:
CloudPay leads the way in global pay innovation, delivering industry-leading solutions spanning payroll, payments and on-demand pay.
With a proud heritage of 25+ years, we serve over 2,000 companies globally in 130+ countries handling $24bn+ of payments in 110+ currencies. Our unified, end-to-end pay solutions enable payroll teams to pay their global workforce with outstanding accuracy and minimal risk, more efficiently than ever before.
We use advanced technology to offer seamless API integrations, powerful automations, and AI-driven insights with real-time analytics — all designed to empower businesses with enhanced decision-making and better, faster processes.
Our unparalleled managed service is tailored to each client with dedicated personalised support and guidance, while our in-country knowledge and global regulatory expertise unlocks unparalleled expansion opportunities for businesses to grow and thrive, compliantly and efficiently.
Working with CloudPay means gaining a strategic partner that harnesses the latest technology to drive growth and optimise the payroll and pay experience.
Together, that’s High-Performance Payroll, from CloudPay.
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Bruce Callander
bruce@bluesky-pr.com
+441582 790700