With 70% of business-critical data in payroll, our study shows Europe’s leaders turning compliance and accuracy into growth

Conducted in partnership with Transiris, the 2025 research combines quantitative survey data and qualitative interviews with C-level and payroll experts from companies operating across multiple jurisdictions. The study shows that European organisations are increasingly recognising payroll as a core business function, one that ensures compliance across borders, protects business integrity and enhances employee confidence.

 From compliance burden to strategic advantage

The report reveals that 60% of payroll leaders struggle to keep pace with changing labour laws, while 62% cite frequent regulatory updates as a top operational challenge. In a multi-country environment, each jurisdiction adds complexity through different rules, deadlines and reporting formats. For cross-border employers, local expertise has become indispensable.

Nearly half (48%) of respondents said that regulatory compliance is a key factor when deciding whether to manage payroll internally or outsource it, while over half (53%) rely on external payroll providers for accuracy and legal alignment. A similar share (53%) also consult legal and tax advisors for deeper regulatory guidance.

“Behind every payslip, there’s a number that can build or break trust. Payroll is a data-rich ground in any organisation, holding critical information for both HR and finance. When numbers are accurate, compliant and visible, payroll stops being a process and becomes a strategic source of analytics for the entire business”, concludes Ioana Vlad-Rădulescu, Partner, International Payroll & Compliance, Forvis Mazars.

Accuracy: the foundation of trust

Across all countries, accuracy remains the most critical expectation for both employees and employers. Nearly one in three organisations report payroll calculation errors, and one in five admit these issues have damaged employee confidence. In a competitive labour market where retention and employer reputation are paramount, even a single payroll error can have disproportionate consequences.

Forvis Mazars’ research highlights how internal controls, audits, and proactive data governance are increasingly embedded into corporate payroll structures. Around 47% of surveyed organisations conduct regular audits, while 43% maintain dedicated in-house teams to strengthen control and transparency.

As accuracy becomes non-negotiable, payroll is also gaining visibility at board level as a direct contributor to organisational reliability and brand integrity.

Payroll data: the untapped strategic resource

One of the report’s most striking findings is that approximately 70% of business-critical data passes through payroll systems, from salaries and benefits to tax IDs, time logs and cost centre data. Yet, many organisations still underuse this information.

“Payroll accuracy is non-negotiable, even a single error can have a disproportionate impact on employee trust and morale. Across Central and Eastern Europe, companies are also preparing for a new era of transparency, where equal pay, compliance and data-driven payroll will become essential to competitiveness and trust”, adds Jana Boštíková, Partner, HR & Payroll, Forvis Mazars in Czech Republic.

When integrated effectively, payroll data can provide strategic insight into workforce planning, risk management, and financial forecasting. However, without automation and system interoperability, businesses risk fragmentation and security vulnerabilities.

Despite this potential, nearly 60% of organisations report inconsistent service quality from payroll providers, and only 17% have implemented automated compliance monitoring systems. The opportunity lies in strengthening integration and harnessing automation to turn payroll data into actionable intelligence.

Automation and human expertise: a necessary balance

Automation is transforming payroll operations across Europe, but technology alone is not enough. The study reveals that 45% of leaders identify process optimisation and cost reduction as their top challenges, yet less than one in five have adopted automated monitoring solutions.

Forvis Mazars advocates a blended model that merges intelligent automation with human-led advisory. This approach enables payroll teams to process faster, think smarter and act strategically, combining technology’s precision with human insight’s adaptability.

Pay transparency and equal pay: from obligation to opportunity

Equal pay has become a defining issue in European workplaces. Driven by the EU Pay Transparency Directive (2023/970), companies must evaluate and disclose gender pay gaps and, if inequalities exceed 5%, take corrective action within six months.

According to the report, 45% of HR leaders cite compensation as a major challenge, and 51% of organisations would switch providers for stronger compliance support. Payroll departments now play a critical role in ensuring accuracy, transparency and fairness.

While the EU Pay Transparency Directive (2023/970) is not legally binding for the Republic of Moldova, the country is increasingly aligning its labour, payroll and fiscal practices with European standards. Driven by its broader European integration agenda and domestic labour market priorities, Moldova has begun strengthening pay transparency, payroll governance and the use of workforce data to address structural inequalities. These developments position payroll not only as a compliance function, but also as a strategic tool for improving trust, fairness and workforce participation - mirroring trends observed across Europe.

Against this backdrop, gender wage disparities remain a significant challenge in Moldova’s labour market, with women continuing to earn substantially less than men on average. According to the National Bureau of Statistics of the Republic of Moldova, in 2024 women earned approximately 16.6% less than men, meaning they would need to work nearly two additional months to achieve the same annual earnings as their male counterparts. When measured on an hourly basis, the gap narrows but still persists: women earn approximately 5–9% less per hour than men.

Multiple analyses, including reports by the International Labour Organisation and national partners, indicate that the gender pay gap remains particularly pronounced among women aged 25-34 years, where returning from maternity leave often leads to choosing more flexible but lower-paid jobs.

“Sectoral differences in Moldova remain significant, with the widest gender pay disparities observed in higher-paid fields such as information and communications and financial activities, where men earn on average around 40% more than women. These persistent gaps point to deeper structural inequalities in pay and labour market participation, despite existing legal frameworks aimed at ensuring equal remuneration. Strengthening pay transparency and making systematic use of payroll data are essential steps in identifying and addressing these inequities, while supporting Moldova’s alignment with broader European efforts to ensure equal pay for equal work.”, mentions Lucia Magomedov, Outsourcing Manager, Forvis Mazars in Moldova.

At the same time, recent legislative developments signal a positive shift. As of 1 January 2025, Moldova has introduced new fiscal provisions allowing certain employee benefits to be treated as tax-deductible within defined thresholds, following amendments to Articles 19, 20 and 24 of the Fiscal Code. These changes provide greater clarity and compliance certainty for employers while supporting more inclusive compensation practices.

To retain qualified talent and attract new specialists, employers are increasingly diversifying their social benefit packages. These include meal vouchers, sports subscriptions, transport and meal allowances, medical expense reimbursements, insurance premiums, gift vouchers and other employer-funded benefits.

“Of particular importance is the deductibility of compensation for alternative childcare services for children under the age of three, capped at MDL 2,500 per month per child. This measure provides both financial and psychological support for women returning from childcare leave, encourages higher workforce participation and represents a meaningful step toward greater pay equity.”, explains Irina Țurcanu, Outsourcing Manager, Forvis Mazars in Moldova.

Forvis Mazars’ experience across the CEE region confirms that the new directive is an opportunity to streamline remuneration systems, improve HR data quality and empower managers to communicate more transparently about pay.

Download the full report here.

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About the study

The 3 non-negotiables in modern European payroll is based on quantitative and qualitative research conducted by Transiris on behalf of Forvis Mazars in 2025. The survey gathered 1,037 responses across 13 European markets including Austria, the Czech Republic, Hungary, Poland, Spain, Germany, Romania, the UK and others. To complement the survey, 10 in-depth interviews were conducted with payroll and HR decision-makers from multinational and local companies, offering contextual insights into the evolving payroll landscape across Europe.

Contacts

Emilia Popa, Head of CEE MarCom, Forvis Mazars
emilia.popa@forvismazars.com  / +4 741 111 042

Mădălina Lazăr, PR & Corporate Communication Manager, Forvis Mazars in Romania
madalina.lazar@forvismazars.com  / +4 763 385 622

About Forvis Mazars

Forvis Mazars Group SC is an independent member of Forvis Mazars Global, a leading professional services network. Operating as an internationally integrated partnership in over 100 countries and territories, Forvis Mazars Group specialises in audit, tax and advisory services. The partnership draws on the expertise and cultural understanding of over 40,000 professionals across the globe to assist clients of all sizes at every stage in their development.

Visit forvismazars.com to learn more.

About Forvis Mazars in Moldova

Forvis Mazars launched in Moldova in January 2025, following nearly two decades of distinguished service in the local market. Empowering over 50 people to deliver exceptional client service in audit, tax and advisory with confidence and expertise, the partnership combines deep local expertise with global insight.

Visit forvismazars.com/md to learn more.