UK payroll errors persist as delays & manual work rise

Research published by Finity shows that 89% of payroll professionals experienced payment errors in the past year, highlighting persistent problems in UK payroll operations.

The survey of 342 people in finance and payroll roles found errors were not only widespread but frequent. Two-thirds of respondents said they deal with payroll errors weekly, monthly or quarterly, while 38% said problems arise every month.

Manual processing featured heavily in the results. Almost half of those surveyed, 48%, said human error during manual payroll processing was the most common cause of mistakes, up from 43% in the previous year's research.

Other causes were also tied to internal processes. Some 32% cited incorrect or incomplete data, another 32% pointed to stress, workload or time pressure, and 30% blamed disconnected or non-integrated systems.

Delays Rising

Payment delays were also common. More than two-thirds of respondents, 68%, said they had experienced delays caused by their current systems and processes, up from 43% in the previous year.

Poor integration between systems was identified as the main cause of delayed worker payments, with 49% naming the links between onboarding, timesheets, payroll and payments as the biggest issue. A further 46% said overly complex banking and payments processes were a major operational barrier.

The findings suggest many payroll teams still work across fragmented systems. Seven in 10 organisations said they use more than one platform to run payroll, and 63% reported frequent or occasional problems when transferring data between systems. These included mismatched data, duplicate entries and failed transfers.

Manual Burden

Manual work remains embedded in many payroll functions. The research found that 43% of respondents still handle bank reconciliation manually, while 36% process timesheet approvals the same way.

A lack of automation was identified as a core issue by 32% of respondents. The figures add to evidence that many payroll departments still rely on labour-intensive processes even as the wider finance sector shifts towards more integrated software tools.

The operational burden appears to be affecting productivity. More than three-quarters of payroll professionals, 77%, said they lose up to 11 hours a week because of inefficient systems or processes, slightly higher than the 75% reported a year earlier.

Respondents also described the strain caused by existing payroll technology. Some 28% said their systems were outdated or overly complex, 27% said they felt overwhelmed by payroll administration, and 26% said a lack of integration between payroll and banking or payments created administrative issues or delays.

Recruitment Impact

The findings are likely to resonate particularly in recruitment, where payroll often involves temporary workers, contractors and complex supply chains. In those environments, errors or delays can have immediate effects on worker trust and client relationships.

Varun Monteiro, CEO of Finity, said: "Our latest data paints a clear picture of an intensifying issue: complexity, disconnected systems and insufficient automation are creating negative experiences for payroll teams and putting the reliability of paying workers on time at risk.

"Payroll should be one of the most predictable and controlled functions in any organisation. Yet our research shows that payment delays, errors and inefficiencies remain widespread, largely driven by internal systems that organisations have the power to improve.

"While some progress has been made since 2025, the persistence of manual processes, poor integration and data transfer issues suggests that industry-wide financial unity is still a way off.

"By better aligning payroll and payments through technology and integration, organisations can reduce errors, save valuable time and ensure workers are paid accurately and on time."

APSCo said the results reflected the pressure facing recruitment companies, which often manage payroll across multiple worker types and compliance regimes.

Samantha Hurley, operations director at APSCo, said: "These findings reflect the operational reality many recruitment businesses are navigating. As recruitment businesses manage increasingly complex workforce supply chains and compliance demands, the processes behind paying workers have become more demanding, yet the technology supporting them has not always kept pace.

"For recruitment businesses, this goes beyond an internal operational issue. The ability to pay workers accurately and on time underpins trust across the entire supply chain, from contractors to clients. When payroll processes become slow, fragmented or difficult to oversee, they can create unnecessary risk and administrative burden for recruitment companies operating in an already complex environment.

"As scrutiny across labour supply chains continues to evolve, the ability to demonstrate reliable and transparent payroll processes will become increasingly important. Recruiters that take a proactive approach to strengthening their payroll processes will be better placed to maintain trust with workers, clients and regulators alike.

"Ultimately, efficient payroll operations are not just an administrative function - they are a critical part of running a reliable and competitive recruitment business."

The research was conducted online by Research Without Barriers among 342 respondents employed in finance and payroll departments and involved in their organisation's payroll.