2025-2026
Annual payroll survey report
Discover this year’s industry trends.
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2025 marks the seventh year Moorepay have run the annual payroll survey.
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This year gathered over 400 responses.
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This report is intended to give you a clear view of the current payroll landscape and future developments.
Contents
Chapter 1
Methodology
In this chapter you’ll learn
- How Moorepay gathered and validated industry-wide payroll insights.
This year, Moorepay collected responses from 445 professionals working within the payroll industry.
The survey was conducted using an online form (via SurveyMonkey) and promoted to Moorepay’s contacts and CIPP subscribers by email, and to wider members of the industry via targeted LinkedIn and Meta adverts.
The respondents are from a range of business sizes (from 1 to 5000+ employees) and a variety of industries. Their job titles include roles in payroll only, and finance and HR with payroll responsibilities, across in-house, outsourced, and bureau organisations.
Chapter 2
Eight headline findings in 2025
In this chapter you’ll learn
- What key findings this year’s survey uncovered across the payroll industry.
- What the results reveal about emerging trends, challenges, and priorities shaping payroll in 2025-2026.
1. Two thirds of companies are processing their payroll in-house.
Moorepay asked: ‘How do you currently process your payroll?’
Processing payroll in-house using payroll software is predominantly preferred (used by 68% of respondents). Interestingly, popularity has exponentially increased since 2023 to the current date.
Following a decline last year, the use of free HMRC software has sharply increased in 2025 (by 65%). This suggests cost-saving measures are being prioritised.
Outsourcing payroll to a provider has continued to decrease in 2025 (-22%). Conversely, outsourcing payroll to an accountant has seen an 18% increase, though only 6% of respondents choose to process their payroll this way.
Looking ahead, Moorepay’s legislation experts predict the Employment Rights Bill, widely seen as the biggest shake-up in employment law for decades, will bring a swing back towards an increase in outsourcing. It’s likely businesses will be seeking expert advice to review their contracts, policies and processes to remain compliant in a more complex legislative landscape.
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2. Cloud-based payroll software continues to pave the way for future innovations.
Cloud-based payroll software has been leading the way as the preferred type of payroll solution since 2021.
Cloud based software remains the most popular solution year-on-year, with 41% of Moorepay’s survey respondents preferring this solution in 2025.
On premise or desktop software remains the second most favourable solution, with popularity appearing to increase again (+8%) following a plateau during the previous two years.
Managed services with paper, telephone or email input has considerably increased in 2025 (+36%). Whereas managed services with file, spreadsheet or CSV input has continued to decline over the last three years with only 11% of respondents preferring this solution (lowest figure to date).
3. All-in-one HR & payroll software popularity has blown up since 2023!
The majority of Moorepay’s survey respondents use an integrated payroll and HR solution (39%), representing a substantial exponential increase of 36% since 2023.
Using two separate systems of HR and payroll has decreased slightly this year (-2.5%), in line with more users favouring integrated solutions.
API integration continues to be on a downwards trend, representing 8% of responses because payroll professionals are increasingly moving to truly all-in-one software.
The surge in popularity of integrated payroll and HR solutions would suggest the UK is catching up with trends seen globally, and particularly in the US, for some time.
For example, globally, integrated payroll and HR platforms are becoming standard, with 68% of deployments now being cloud-based. And North America leads this adoption, accounting for 38.5% of global market share.
Integrated payroll and HR solutions are becoming increasingly popular because they offer the best of both worlds. They usually increase efficiency through reducing admin and human error, automating processes and providing a seamless employee experience.
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By integrating your payroll & HR platforms, data is shared seamlessly – meaning no more flicking between systems.
Accurate data visibility
In payroll and HR, data is king. True integration means data is mirrored across platforms, giving you one source of truth.
Simplify processes
Integration allows you to enter and approve things like new starters, expenses, and employee updates in one system, streamlining processes.
4. Payroll market churn is declining – those looking for a new provider slows year on year.
Being with a payroll provider for less than one year is on a slight downwards trend, suggesting customers are committing to their current providers for longer.
Since Moorepay began this survey, the results for this question have always been quite turbulent and the same can be said for this year’s results.
Long-term loyalty with providers is rebounding, rising sharply to 27% in 2025 after a dip in 2023-24. This suggests a renewed trend towards long-term relationships with payroll providers after previous volatility. Are retention strategies improving or are there barriers to switching?
Being with a current payroll provider for 3-5 years has increased to 21%, on par with 2023 and the highest number since we began the survey. This indicates that customers who switched payroll providers during 2020-2022 are now settling into mid-term relationships with their choice of provider.
5. Payroll frustrations increase by a worrying 20% since 2024.
Payroll is more frustrating than last year with all respondents reporting at least one pain-point.
Frustrations with payroll have increased by 20% in 2025, with the most common frustrations being limited functionality (14%) and limited reporting/analytics (13%).
There’s an increase in frustrations with most pain points and payslip accuracy has seen the largest spike (+185%); this is a major emerging concern in 2025. Limited functionality and lack of automation also show notable increases (51% and 35%, respectively).
Accessibility of the software (3%) and payslip accuracy (5%) were cited least in 2025 which is consistent with previous years.
6. It’s getting easier to switch to a new payroll provider.
Moorepay asked: ‘When switching payroll provider, how easy did you find it?’ Good news: Most customers think it’s easy to switch payroll providers, with “very easy” responses rising by 23% in 2025.
Cumulatively, over half of respondents find switching easy in 2025 – the highest across all years.
Neither easy nor difficult dropped to 17% in 2025, a year-on-year decrease of 25%. This indicates fewer respondents are undecided and opinions are polarising towards easy or difficult.
Respondents finding it very difficult to switch payroll providers increased to 17% in 2025 (+17% year-on-year). However, customers finding it quite difficult fell by -7%, continuing a downwards trend.
Overall, switching payroll providers has become easier. This is thanks to modern software and cloud-based technology that streamline data migration and integration while improving security and efficiency. In addition, increased competition, especially from newer providers who are focused on delivering a better user experience, has pushed payroll organisations to simplify their transition process and ensure a smooth, hassle-free switch.
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7. Perceptions that it’s ‘too much hassle’ to switch payroll providers remain.
The majority of respondents still haven’t considered switching (61%). This is largely consistent with 2024 figures, suggesting loyalty is recovering.
Of those who have considered switching but decided not to, 20% cite that it was too much hassle. This contrasts to our earlier findings where over 50% of respondents reported to now find switching easy (the highest level across all years). So even though the process of switching is perceived as simpler than before, for those who considered switching but didn’t, complexity remains a deterrent.
Money doesn’t seem to be the biggest barrier, with only 8% of respondents unable to secure investment from the business for better payroll solutions.
The top reason for those who answered “yes” is “something else” (37%), possibly suggesting bespoke issues to switching.
8. Automation remains the most coveted payroll feature.
When we asked, ‘what would you most like to see from your payroll provider?’, the most popular answer was ‘automation of payroll processes’.
Automation of payroll processes remains the most requested feature at 49%, a slight decrease from 2024.
Second to automation is improved reporting & analytics, with 45% of respondents requesting this feature which is the same proportion as 2024.
As usual, the lowest priority is branding and customisation at 13%, suggesting that this is not a predominant driver for most businesses.
Over a third of respondents would like to see:
- Automation of payroll processes (49%)
- Improved payroll and analytics (45%)
- Improved employee self-service (37%)
- A simple clean look & feel (33%)
Looking ahead, AI will undoubtedly play a huge part in advancing payroll automation and strengthening payroll analytics. AI-enabled payroll systems pave the way for more intuitive self-service, quicker payroll processing, greater accuracy, and improved compliance. AI adds a whole new level of intelligence (and potential) to modern payroll technology and can act as a virtual assistant to payroll teams, reducing admin, improving accuracy, and strengthening compliance.
Chapter 3
Conclusion
In this chapter you’ll learn
- A recap of the key 8 headlines.
Here’s a recap of the 8 hottest headlines from Moorepay’s 2025 Annual Payroll Survey:
- Two thirds of companies are processing their payroll in-house.
- Cloud-based payroll software continues to pave the way for future innovations.
- All-in-one HR & payroll software popularity has blown up since 2023!
- Payroll market churn is declining – those looking for a new provider slows year on year.
- Payroll frustrations increase by a worrying 20% since 2024.
- It’s getting easier to switch to a new payroll provider.
- Perceptions that it’s ‘too much hassle’ to switch payroll providers remain.
- Automation remains the most coveted payroll feature.
We hope this report has helped you to paint a picture of the payroll industry in 2025. Don’t forget to stay subscribed to our updates for next year’s report to stay on top of industry trends.
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