9 Payroll Trends That Will Change The Way You Work in 2025

Over the past few years, payroll has been transforming from a back-office function into a strategic asset that shapes workforce engagement and business agility. And it will continue to do so in 2025.

Companies are leaning into self-service functions and real-time pay adjustments, offering employees flexibility while freeing up HR and payroll teams for higher-value work. Advanced compliance tools and AI-driven audits are also setting a new standard, turning complex regulations into manageable, real-time updates that reduce risk and increase confidence.

These changes don’t just enable teams to keep pace with industry trends. They help business owners build a payroll function that supports growth and boosts employee trust. Explore how these forward-looking strategies can redefine payroll in 2025 and beyond.

Payroll as a stronger strategic partner within organizations

Payroll operations teams are emerging as strategic players, influencing workforce planning, compliance, and cost-effectiveness.

Nearly 75% of payroll professionals believe they’re not currently fully utilized as strategic decision-makers. In 2025, the shift toward automation and analytics will enable payroll teams to transition from operational tasks to delivering business-critical insights and metrics, enabling them to be valuable contributors to decision-making.

Tools like Deel’s Compliance Hub and analytics dashboards support payroll teams by automating repetitive tasks like data entry and compliance research, allowing more time for advising on workforce management and identifying growth opportunities.

Keep reading: The Rise of Strategic Payroll: From Back Office to Business Advantage

Increased self-service in payroll management

In 2025, self-service in payroll management will become a defining trend as companies look to improve efficiency and empower teams. This approach allows companies to streamline payroll and HR tasks with quick adjustments, reducing reliance on administrative support.

We’re projecting that self-service will come to the forefront in a few major ways:

• For workers: There will be more opportunities for workers to easily manage time tracking and gain increased visibility into their PTO and employee information via self-serve platforms to increase autonomy and lighten payroll managers’ workloads
• For payroll managers: Payroll managers will gain more control over their payroll system setup, as trends are pointing toward more customizable self-serve functions for payroll calendars, system onboarding, and pay group creation, allowing them to get payroll off the ground quickly for a new entity

This trend addresses the needs of both employees and back-office professionals, automating time tracking and payroll calculations and improving payroll accuracy while saving time on manual entries. Self-service capabilities are key for 2025 as companies prioritize user-friendly, customizable workflows that enhance productivity and streamline processes.

Shifts in the gender pay gap, rising compensation for specialized skills, and more

Compensation trends are shifting as companies adapt to global and regional labor dynamics. By understanding these trends, payroll managers can anticipate market-driven pay adjustments, support equity and compliance, and strengthen strategic pay decisions.

Drawing on data from Deel’s State of Global Compensation Report, key trends for 2025 include significant regional salary growth in countries like Turkey and the UK, where compensation adjustments are aligned with inflation rates to support talent retention.

The gender pay gap is narrowing in certain roles, particularly in tech, with companies increasingly focusing on equity compensation to attract top talent in technical fields. The demand for specialized skills in engineering, data, and product development roles has led to rising compensation in these areas, as companies compete to secure high-caliber professionals.

By aligning pay strategies with these trends, teams can strengthen their talent acquisition efforts and meet the expectations of an evolving workforce.

See also: The Remote Team’s Guide to Employee Compensation Strategies

Increased demand for professional development and networking opportunities

As payroll shifts toward strategic roles, the demand for international payroll expertise rises. Deel’s International Payroll Fundamentals and Global Hiring Fundamentals courses are two key resources that empower professionals to gain confidence when managing intricate processes and requirements in different countries.

As global payroll grows in complexity, professionals who continuously upskill will stay competitive. Deel’s Global Payroll Community offers a platform for payroll professionals to connect, share best practices, and stay updated on compliance.

In the coming year, networking will be vital for professionals seeking to benchmark their strategies and stay informed on trends and technological advancements.

See also: What Trends Are Shaping the Future of Work, and What Are the Main Drivers of Change?

AI as a partner for payroll auditing and compliance support

One in three businesses plan to increase their investment in artificial intelligence, which is becoming more commonly used in payroll systems.

AI has major implications for HR management and payroll processing, given the large volume of personal and financial data involved. It can analyze this information in virtually no time, recognize patterns humans wouldn’t, and make suggestions. You could use it to spot issues like pay discrepancies or unused employee benefits and leverage the insights to refine your payroll best practices.

In 2025 and beyond, AI will be able to help you with global compliance management. For example, Deel AI is a workplace assistant similar to a chatbot that can answer questions on international tax compliance, salary data, and your own workforce.

With Deel AI, you can:

• Easily access reliable HR information and insights from your employee data, eliminating the need to search across multiple tools or platforms
• Get instant information on local laws in over 150 countries
• Quickly analyze your own workforce data through instant reports, gaining valuable insights without the manual effort of spreadsheet reporting or using multiple tools
• Maintain secure access and data protection with a Virtual Private Cloud (VPC) environment

Deel is also helping companies mitigate misclassification risks with the Deel Lab Misclassification Assessment, which combines AI with award-winning research to help you compliantly classify workers with over 90% accuracy.

Samuel Dahan, Chief of Policy and Chair of Deel Lab, explains: “The system can predict whether a worker is an independent contractor or an employee anywhere in the world. However, the law is constantly changing, making these predictions more complicated. To account for this, we are training the algorithm to pick up on the complexity of each case.”

Our research shows that companies are not only embracing AI in their processes but are also hiring for more AI roles, especially in the US, Canada, and the UK.

Integration of payroll into holistic HR systems

In a commissioned study conducted by Forrester Consulting on behalf of Deel (January 2024), almost half of surveyed HR leaders aim to reduce global payroll complexity and consolidate their global payroll systems in the next 12 months

If you use multiple payroll services, you’re more than twice as likely to encounter difficulties with management and global reporting. With an integrated solution, your human resources and accounting teams will have access to holistic, real-time data and standardized reporting and processes that minimize the risk of payroll errors.

See also: The Case for Global Payroll Consolidation

An all-in-one platform like Deel enables companies to manage payroll, HR, compliance, and more for their entire workforce in one place. This includes direct employees hired under owned entities, EOR employees, and independent contractors.

Businesses at the forefront of this movement have noticed significant time savings. For example, Deel customer Yodo1 has saved over 100 hours per month by unifying payroll and HR across 30 countries.

Centralizing payroll software also supports the HR trend of prioritizing the employee experience, which 75% of CHROs plan to make their top focus in 2025. To learn more about the role of people teams in coming years, download our Future of HR Report.

Increased emphasis on data security and privacy

Cross-border payroll data compliance will become a top priority in 2025 as 50% of organizations plan to invest more in safeguards. Global payroll providers like Deel are meeting the demand for increased protection by maintaining robust security features such as:

• Ensuring GDPR compliance
• Encrypting all network communication by running network traffic over SSL/HTTPS
• Providing secure single-sign-on experiences to manage user identities in a central location
• Regularly updating and testing systems to identify potential vulnerabilities
• SOC1,2,3 compliance and ISO 27001 certification

Investing in safeguards is predicted to prevent up to two-thirds of data breaches in companies. Payroll departments are especially vulnerable and can benefit from extra security as they manage a significant amount of personal and financial information through cloud-based payroll software and HR software.

In the event of a breach, whether it's due to external attacks or department errors, employees may lose trust in the company. Governments have also been tightening laws and increasing penalties in response to growing cybersecurity threats. For instance, GDPR fines companies up to 20 million euros (about $22 million USD) for data breaches.

See also: How to Navigate Data Protection and Privacy Across Borders

The rise of on-demand pay services

On-demand pay is a payment method that gives employees wage access before the scheduled payday, allowing them to take home a single day’s wages or all the money earned in the stipulated payment period to date.

With the introduction of flexible payroll tools, payroll teams will be able to:

• Pay employee salaries up to a month early
• Add employee expense adjustments to be paid out immediately at any time
• Add bonuses or commissions to be paid out at any time
• Onboard new hires at any time
• Run payroll at any time in just a few clicks

By offering flexible payment methods like on-demand pay, companies can support employees’ financial wellness by ensuring they have money when they need it and alleviating financial stress.

See also: Employer's Guide to On-Demand Pay: Definition, Uses, and Benefits

On-demand pay is gaining popularity, particularly among young workers—in fact, 83% of Gen Z say flexible payroll is important to them. As more of this generation enters the workforce in 2025, companies should embrace on-demand payroll options to attract and retain key talent.

Flexible pay is especially well-suited to the gig economy, as you can pay freelancers the moment you’ve completed a project and maintain their trust.

See also: 9 of the Best Ways to Pay Independent Contractors Online

Easier compliance with global payroll regulations

2025 will bring significant changes to legislation that affect the payroll industry. Companies are responsible for staying up to date with these new policies but over a third struggle with compliance. Recognizing these difficulties has led to a renewed focus on maintaining continuous compliance.

Pay transparency laws are a major talking point as many governments are currently revising their requirements. For instance, the EU introduced the Pay Transparency Directive in 2023 and member states plan to adopt it on a national level by 2026. US states are also gradually implementing pay transparency laws, with Vermont and New York being some of the latest.

Now that payroll teams work across borders, 2025 is the year to take a proactive approach to compliance management. Instead of waiting for announcements, you can easily monitor updates and risks with Deel’s Compliance Hub.

Our Compliance Monitor automatically scans, collects, and explains the latest relevant regulatory changes globally, covering areas such as wages, pensions, private insurance, leave changes, and tax obligations. The Workforce Insights reports proactively alert you to expiring visas, misclassification risks, and other non-compliance with elements such as minimum wage, benefits, and more.

Embrace the future of payroll management with Deel

As we move into 2025, there will be significant advancements in payroll technology that will affect businesses of all sizes, from small businesses to multinational corporations. By embracing these opportunities, you can streamline your operations and enhance accuracy, while also promoting the well-being of your employees.

Deel is an all-in-one global payroll and HR platform that can help you capitalize on emerging trends. Our compliance management tools allow you to keep pace with constant changes in the international arena and within your own company, and Deel Global Payroll enables you to streamline payroll processes and focus on high-value tasks.

See how Deel could transform your payroll function in the coming year by booking a demo today.