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From data to decision-making: Exploring payroll trends in 2025 

January 30, 2025

7 Mins Approx

Payroll Trends In 2025 1

The days when payroll was mostly calculating and processing payments are long gone. Now, it’s a strategic function that can support employee experience and provide invaluable insights that aid wider decision-making.  

In 2024, we saw the rise of tools that can support this — from global payroll solutions that free teams up by automating compliance to AI systems that can enable compensation benchmarking to boost pay transparency. 

But what does 2025 hold for payroll teams? And how can companies continue to adapt to the evolving expectations of employees and wider business functions? 

In this article, we’ll share answers to these questions, exploring four major payroll trends impacting teams. This includes insights and actionable strategies from: 

Key takeaways

  1. Amid a talent crunch and cost of living crisis, payroll teams are under increasing pressure to support employees. 
  2. AI can help payroll teams to work more strategically, enabling compensation benchmarking, providing personalized employee support, and delivering predictive insights. 
  3. Payroll software must evolve to meet the complexities of globalized workforce management and global payroll solutions are leading the way. 

1. The importance of employee support 

Payroll has always been an employee-centric function, but amid a talent crunch and a global cost of living crisis, it’s increasingly critical that teams can extend their support. As Giles puts it, “Payroll is not just about processing wages; it’s about demonstrating empathy and offering meaningful solutions that can alleviate financial stress.” 

Here, we explore two of the main employee support strategies that proved popular in 2024 and are likely to continue to trend in 2025.

Earned wage access

One of the widely discussed payroll industry trends in 2024 was earned wage access (EWA) which allows employees to access a portion of their wages before payday. 

As Lloyd highlights, this can be an incredibly helpful tool that provides financial flexibility and supports employees who may be facing economic hardship. “EWA can be helpful in allowing employees to manage unexpected expenses without resorting to high-interest loans,” she explains, “It’s also an attractive benefit that can give organizations a competitive advantage in attracting and retaining talent.” 

However, it’s not as simple as that. If payroll teams are going to implement EWA in 2025, they’ll need to consider the impact on both payroll administration and employee financial wellbeing. Here, we take a closer look at how.  

Improving employee financial education 

EWA only works when it’s matched with financial education. Otherwise, it often acts as a short-term fix to a long-term problem. As Lloyd explains, “One of the biggest risks is that if used improperly, employees may become reliant on accessing their wages early, leading to poor financial planning.” 

To resolve this issue, organizations need to emphasize the responsible use of EWA and put the context of broader financial education. As Giles says, “Workshops or resources on budgeting, debt management, and saving strategies alongside financial wellness apps can help employees plan for expenses and track their spending.”

Optimizing payroll processes to facilitate EWA 

EWA is not a one-size-fits-all solution. As Lloyd points out, it can add complexity to payroll administration, particularly if it’s not integrated seamlessly with existing systems. It can also impact cash flow management if a significant number of employees use the service. 

As such, payroll teams should focus on developing a clear implementation framework. This means evaluating integrations (more on this later) and setting clear usage policies for employees.

Benefits optimization 

As Giles identifies, the cost of living crisis calls for organizations to reconsider the benefits they offer employees; payroll teams play a key role in this by providing analytics about which benefits are most commonly used and valued in countries across the globe

Giles recommends that payroll teams also conduct surveys to understand financial pain points. “These insights can guide payroll in implementing relevant solutions to support needs such as transportation subsidies, meal vouchers, or childcare support,” he says. 

2. The rise of pay transparency 

Pay transparency laws are coming into effect across the EU and other countries across the globe are following suit. This puts increasing pressure on payroll teams to provide the C Suite with the data they need to ensure that global teams are paid equitably. But it’s not just legislation that’s driving this shift. 

As Nierstedt points out, pay transparency is a real tool to attract and retain talent; in the talent crunch, companies are under more pressure to use it. “Across many countries, the working population is shrinking,” he identifies, “This means workers have more leverage and they want to make sure they’re being paid fairly in comparison to their peers.” 

In this section, we take a closer look at how payroll can support companies as they implement pay transparency. 

Creating pay structures

Pay transparency starts with actually ensuring that everyone is being paid competitively. And this means creating clear structures including salary bands that align with the value of each role within the global economy (according to market data) as well as reflecting responsibilities, experience, skills, and impact. 

For example, in one field, entry-level roles might have a salary range of $50,000 to $65,000, reflecting the foundational skills and responsibilities expected at that level. Mid-level positions, requiring different skills and more experience, could range from $70,000 to $90,000. Senior-level roles, with high-impact contributions and leadership expectations, might start at $100,000 and scale upward. 

These roles would then need to be tailored to meet local expectations. While the mid-level role might command $70,000 to $90,000 in one city or country, it might need to be $85,000 to $110,000 in an area with high living costs, for example. 

It’s important to centralize this data in order to make effective decisions. Giles recommends compensation management tools that “help to centralize data, ensure compliance, and provide analytics to guide decisions.” 

Using localized data effectively  

Ultimately, payroll must support the C-Suite to determine their position in the global marketplace. Should they opt for paying salaries in the higher percentile to attract talent or sit a little lower to save costs? Can they offer a more comprehensive package with localized benefits or should compensation be the biggest talent attraction factor?

Giles puts the issue like this: “Companies must balance global fairness with local relevance, ensuring employees in different regions feel valued without overpaying or underpaying in specific markets.” 

As such, it’s crucial to use localized data when creating salary bands, tailoring compensation strategies to fit local laws and cultural expectations; this means looking at local market data — and lots of it. Nierstedt explains, “The first thing any payroll team should do is assess the level of expertise they have in house.” Most won’t have access to the level of data they need, but can plug the gaps with external consultants.  

Building a global compensation strategy for pay transparency

3. The rise of integration-first software 

As global workforce management becomes even more complex, companies are increasingly moving away from payroll systems that promise to handle everything but deliver inefficiency and complication. Instead, they’re looking toward flexible software that perfects core functionality and prioritizes integration. Let’s take a closer look. 

The importance of integration

Often, payroll software can’t keep up with modern payroll demands, Nierstedt explains. “Solutions are often built on outdated software,” he says, “They can’t deliver all the features you need, but they come with lock periods that make it hard to integrate with other solutions.” How can you integrate with timesheets if data can’t come in after the lock period, for example? 

The lack of integration is a major issue for companies; as Giles explains, the demand for integration exists on both the employee and payroll side. “Teams need to manage employee information in real-time to enhance efficiency, reporting, and compliance,” he explains, “Meanwhile employees expect streamlined processes when accessing pay slips, benefits, and PTO requests.” 

In 2025, as increasing numbers of businesses expand across the globe, they’ll come face to face with the need to make a decision – keep trying with outdated systems or transfer to  integration-first approach. 

Global payroll solutions  

Globalization adds another layer of complexity. Companies need to stay compliant with local payroll laws, tax requirements, and compliance standards across the countries where they hire and this means they end up using dozens of local payroll vendors across different countries alongside their core payroll platform. 

A global payroll solution reduces error by ensuring that employee data is consolidated, making it easier for organizations to meet regulatory requirements, optimize costs, and support strategic initiatives. 

And it makes sense that demand for these integrated solutions is rising… As Lloyd puts it, “The globalized workforce is growing, but there’s no longer a need for an individual who knows the ins and outs of labor laws in several regions.”

Multiplier’s global payroll solution, for example, calculates multi-country tax, benefits and compensation for workers in over 100 countries, generating payslips, paying in local currencies, and delivering insight-driven reports. 

It also integrates with HRMS, invoicing, expense management, and time-tracking tools. As Nierstedt says, “At Multiplier, we’re not trying to own everything. We’re trying to deliver a strong global payroll solution that you can use alongside your core HRMS.”

4. The evolving role of AI

“It’s no secret that AI is already revolutionizing payroll, automating repetitive tasks, and enhancing accuracy,” Lloyd says, “however, when it’s used correctly, AI can extend far beyond automation.” 

Here we take a brief look at how the trend could evolve in 2025, according to our experts. 

Compensation benchmarks

As we explored earlier in the article, it can be hard to access and interpret enough data to meaningfully optimize your compensation strategy. With AI tools, however, you can aggregate a wide breadth of data, spot trends, and uncover actionable insights to create a more equitable and competitive compensation strategy.

To take an example, a company might review its compensation data with the support of an AI tool. They might then discover, in seconds rather than hours, that female software engineers are consistently earning 5% less than their male counterparts with similar experience and less than the regional market average for their roles.

AI tools can identify this discrepancy by analyzing extensive salary data, tenure, and industry benchmarks. They can also use pattern recognition to highlight underlying causes, such as differences in starting salaries or fewer performance-based raises. As we move into 2025, it’s likely that these solutions will start playing a larger role. 

Personalized employee support

In 2025 and beyond, it’s likely that AI tools will play more of a role in supporting busy payroll teams as they help employees, with personalized recommendations based on work patterns, benefits usage, and employee feedback. For example, an AI system might analyze an employee’s workload, overtime hours, and vacation usage to suggest personalized wellness programs or remind them to take unused leave.

Meanwhile, AI-powered chatbots can provide instant, 24/7 support to answer common payroll or benefits-related questions. As Giles explains, “These tools can learn from past interactions and anticipate common issues, offering solutions tailored to specific queries.”

Predictive insights 

By analyzing historical payroll data alongside external factors such as market trends and economic indicators, AI can forecast future labor costs and identify potential compliance risks before they arise. Though Multiplier’s global payroll solution already automates the process of staying on top of compliance, our team is currently exploring ways to leverage AI to understand and interpret changes in the landscape and stay on top of legislation. 

Finding a payroll solution you can count on  

No matter what 2025 has in store, payroll will remain a function that empowers businesses to support employees. New ways of thinking about strategic insights and employee-driven initiatives are a key part of enabling this, as are solutions like compensation tools, AI, and EWA.  

However, all of these things only work if they are supported by the right payroll software… And in a world where the right skills can be found anywhere, this needs to be a global payroll platform. 

With Multiplier’s global payroll solution, automating compliance, local payments, and reporting becomes easy and teams can enhance employee experience as they expand across the globe. 

Eliminate manual errors, save hours of admin time, and view all important data in one place. Talk to our experts to find out more.

Picture of Beth Longman
Beth Longman

Content Writer

Beth Longman is a content writer at Multiplier. With extensive experience in SaaS, she combines data with storytelling to create engaging pieces.

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