Employers find it increasingly difficult to process payroll under new rules, survey finds

Budget 2027 has introduced a new round of payroll changes

Eimear Byrne, managing director at SD Worx Ireland, said 'confidence in payroll is masking problems and risks' as new laws change the way payroll is managed.

Almost a third of employers surveyed in Ireland said their organisation cannot adapt to new legal requirements in payroll and human resources, according to new research.

This finding comes as employers prepare for a new round of payroll changes following Budget 2027, alongside the recent increase in PRSI rates.

The survey found almost half (45%) of employers in Ireland experienced payroll-related compliance or audit issues in the past year, although 78% said they believed payroll is processed accurately within their organisation and a similar number said payroll delays are rare.

The research was carried out by iVOX on behalf of SD Worx, a payroll and HR solutions provider, surveying 1,000 employees and 301 employers in Ireland. It operates a payroll health check consultancy service to assess the efficiency of companies' payroll systems.

“The research suggests that confidence in payroll is masking problems and risks that are harder to see. Payroll teams need to look beyond whether the pay run was completed and regularly review how the wider operation is working, particularly as legislative and reporting requirements continue to change," said Eimear Byrne, managing director of SD Worx Ireland.

Budget 2027 will bring changes to income tax bands and credits, alongside a rise in the higher-rate employer PRSI threshold from €552 to €600 per week. Pensions auto-enrolment was introduced in January.

On the back of the evolving rules organisations are reviewing how payroll is managed, with 58% of employers saying they already outsource at least some payroll tasks or sub-processes, and 66% saying that this would be their preferred approach over the next three years.