“The one piece of advice I’d give to payroll teams is to embrace analytics and automation.”
That’s what Payroll Leader, Ian Giles said in a recent Multiplier webinar.
And it makes sense – processes for paying staff and complying with tax laws were once tedious, time-consuming, and prone to human error. Thanks to payroll automation, they can now happen automatically with greater efficiency and accuracy than ever before.
In this article, you can learn everything you need to know about the state of payroll automation in 2025. Plus, with the help of industry experts, you’ll discover more about the features to look for in an automated payroll service and the steps to take to automate successfully.
What is payroll automation?
Payroll automation analyzes employee data to complete aspects of the payroll process automatically. It streamlines payroll by handling time-consuming tasks like performing calculations, generating payroll reports, and coordinating tax filings.
Automated payroll software integrates with other operational systems like accounting and HR platforms to process payments with even greater efficiency.
Payroll automation reduces – and, in some cases, eliminates – the need for human intervention, freeing payroll staff up to focus on more complex work that adds strategic value.
The software also significantly reduces the chances of human error disrupting the payroll process and creating problems for employees and organizations.
What are the biggest payroll automation benefits?
Payroll automation offers a wide range of benefits for organizations, payroll professionals and employees. Here we take a closer look.
Time savings and increased efficiency
One of the biggest benefits of any automation software is the time it saves by eliminating or significantly reducing the need for manual effort.
As Global Payroll and People Leader Ian Giles puts it, “When payroll teams are caught up processing payroll, they have little time for strategic action.”
Payroll automation tasks handle the kinds of tasks that are time-consuming or tedious to perform by hand. These include:
- Payroll calculations
- Tax calculations and updates
- Payslip generation and distribution
- Statutory deductions and reporting
- Bank transfers and salary payments
- Holiday and sick pay calculations
- End-of-year reporting
- Expense processing and reimbursement
Instead of spending hours performing these tasks manually, payroll professionals can put their time and talent to better use, focusing on projects that require human thought and analysis.
Improved accuracy and compliance
According to a study by EY, the average payroll error costs a company $291. By calculating wage payments and making tax deductions accurately, automation software helps companies avoid these costly mistakes.
It also eliminates the risk of human error affecting a company’s compliance with regulations.
When tax rates change, for example, the software automatically updates all employee data once the new rates are in the system.
This functionality protects the company from the consequences of accidentally breaking tax and labor laws. These repercussions can include reputational damage, financial penalties, and even prosecution.
Better insights and analytics
With vast amounts of data to analyze, payroll automation tools produce detailed reports, providing businesses with valuable insight to guide future decisions.
For Giles, automation and analytics go hand in hand: “If you can streamline processes, automate repetitive tasks, and reduce the time you spend tracking tax calculations and compliance checks you can free up time. If you pair that with analytics to get insight into payroll trends like overtime or benefits taken you can make strategic change.”
Payroll automation software generates detailed analytics and reports at the touch of a button. It can also track labor costs, overtime trends and pay equity. This data-driven insight empowers payroll teams to identify opportunities to make strategic improvements, like adjusting staffing levels to address rising overtime costs or adjusting compensation in line with a discrepancy.
A positive employee experience
By calculating and issuing accurate payments, payroll automation software ensures that employees receive their wages on time, every time.
Providing a reliable payroll service to employees is fundamental to a positive employee experience. As Giles says, “Payroll is not just about processing wages; it’s about demonstrating empathy and offering meaningful solutions that can alleviate financial stress.”
Features to look for in automated payroll software
When it comes to choosing automated payroll software, there are several key features to look out for:
Future-proof global support
If your company hires internationally, you’ll need automated payroll software that complies with local tax and labor laws. A robust global solution streamlines compliance by automatically applying local regulations and managing payment in multiple currencies.
Multiplier’s streamlined global payroll platform includes compliance support for 100+ countries. Pay employees around the world from the same payroll solution with just a few clicks, and automatically generate payslips in their local language.
Integration with HR systems and accounting workflows
By choosing payroll automation software that integrates with HR solutions, you can streamline operations, eliminate manual data entry errors, and generate more advanced reports. As Natalie Lloyd, Global Customer Success Manager at JGA Recruitment Group, explains: “Integrated systems provide comprehensive insights into workforce trends and financial metrics, meaning you can forecast workforce costs, labor planning, and, overall, give a better employee experience.”
Seamless integrations with HR systems and accounting workflows are fundamental to Multiplier’s global payroll platform. Co-founder and CEO Sagar Khatri says: “We’re deeply integrated with HRIS and accounting systems. If you’re using Workday we’re integrated with that. If you’re using Oracle we’re integrated with that. The flow between accounting systems happens automatically as well. We can also integrate contractor data.”
Robust compliance and security
It’s crucial that automated payment platforms take data security seriously and comply with relevant privacy regulations. If you employ EU citizens or residents, for example, the software you choose must comply with the General Data Protection Regulation (GDPR).
Payroll automation providers usually make their commitment to compliance and security very clear on their websites, so be sure to research each provider carefully and look for relevant messaging and credentials.
Platforms that use Amazon Web Services (AWS) hosting services, for example, are particularly robust from a security perspective.
Complete visibility of all employee data
Any automated payroll software you consider should be easy for payroll professionals to use. This means giving real-time visibility of who’s getting paid and when and providing insight-driven reports.
In Multiplier’s centralized global payroll solution, for example, you can see (and make) payments for your entire workforce in one place. You can also generate headcount, gross to net, and cost center reports at the click of a button.
Comprehensive customer support
While every good automated payroll system should be easy to use, there will inevitably be times when staff require support.
Before committing to a provider, be sure that their approach to customer support meets your business needs.
International teams may need round-the-clock support. Others may want the option of communicating with customer support via specific channels, like email. Multiplier offers 24/5 support.
How to automate payroll
Transitioning from manual to automated payroll may seem daunting but the long-term benefits make it well worth the investment – and it might not be as complex as you think.
There are four main stages to implementing an automated payroll system.
- Select a software provider: Conduct your research carefully, taking into account the functionality you need and looking out for the additional features outlined above. Nierstedt urges employers to think about their present and future global hiring plans when selecting payroll automation software: “If you’re hiring in more than one country, you should seriously consider choosing a solution that can support payroll across regions. You’ll want to give employees the same HR and payment experience no matter which country they’re in.”
- Prepare your data: You’ll need to gather, clean, and validate all the data you plan to migrate to the new payroll system. Your new software provider should be able to advise you on what format you’ll need to organize the data in for migration.
- Migrate your data: Your new payroll provider should be able to support you with this stage of the project. Multiplier, for example, provides a dedicated point of contact from day one.
- Test the new system before running payroll: To make sure everything’s running smoothly before you use the software to run payroll, it’s a good idea to conduct some tests. Try out a few different scenarios in the new system, such as making bonus payments and updating tax rates.
Overcoming the challenges of automating payroll
Like any software implementation project, introducing payroll automation can be challenging. Here’s how to address some of the problems you might face along the way.
Engage stakeholders early
If you’re making a business case to automate the payroll management process, getting key stakeholders on board like senior management, HR, finance, and IT is essential. However, this can be challenging – especially if stakeholders are comfortable with existing processes.
It’s therefore important to engage stakeholders early in the decision-making process and address any concerns they might have from the outset. Use data to demonstrate the value of payroll automation and the cost and efficiency savings the company stands to make from the transition.
Educate payroll staff
Once you’ve secured buy-in to invest in payroll automation, getting the team members who’ll be using it on board and trained is key. Explain why you’ve decided to automate payroll and highlight the benefits of the software for staff. Paint a positive picture of the future, where they no longer have to perform repetitive and tedious tasks.
Communicate the change to employees
Employees will want to know how any change in payroll processes will affect their wage payments.
Be sure to give them plenty of advance notice of the shift to automated payroll and explain what changes they can expect to notice. They may need to log in to a new system to access their payroll data, for example, or they may receive documentation about their pay in a different format.
Highlight the benefits of payroll automation for employees and reassure them that their data will continue to be secure in the new system. Make this information accessible for staff (e.g. on a shared drive or internal website) and allow them to ask questions before the transition takes place.
What does the future hold for payroll automation?
One of the biggest payroll trends is the shift toward AI-driven automation. The impact of AI on global employment is already significant and it’s set to make payroll automation more efficient than ever before.
Unlike rule-based automation, which follows pre-defined logic to process payroll tasks, AI-powered automation learns from data. It identifies patterns and makes real-time adjustments to improve accuracy and efficiency even further.
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.
Introducing Multiplier’s automated global payroll platform
Multiplier’s streamlined global payroll solution allows you to pay your distributed teams easily and compliantly, with automation that could save hundreds of hours.
We’ll keep you compliant in every country – and across country-specific labor laws and regulations – as you grow your international headcount.
Run payroll in 100+ currencies and get automatically calculated tax deductions and withholdings for compliance with local laws.
Multiplier automatically makes payroll adjustments for time off and adjusts tax rates based on real-time updates.
Our global payroll solution has:
- 99.95% accuracy in every cycle
- On the ground local expertise
- Support for 100+ currencies
- 24/5 help
Our all-in-one platform includes integrated support for HR and onboarding through a unified global system. For companies with existing tech in place, Multiplier integrates with other HR and accounting workflows to streamline operations, eliminates manual data entry errors, and enhances overall efficiency in payroll processing.
Make global payroll a breeze. Book a demo to find out more.
Payroll automation FAQs
How can you change automated payroll tools?
If you’re not getting all the benefits of payroll automation from your current software, you might be considering switching to another provider.
Changing payroll automation platforms might seem daunting but you can ensure a smooth transition by following some simple best practices. We’ve set these steps out for you in our article on transitioning to a new payroll company.
Are there automated payroll systems for small businesses?
Yes – employers of all sizes need efficient and accurate payroll. Several automated payroll solutions suit small businesses, including Multiplier. Find out more in our article on the top payroll software for small businesses.
