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

Based on the views of more than 1,000 payroll, HR and finance leaders from 13 markets, the report reveals how payroll has evolved from a transactional necessity into a strategic pillar of organisational trust, data governance and people experience.

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 compensation and compliance dominate HR agendas across the CEE region, Romanian leaders go beyond these priorities - with over half citing talent attraction and retention as their most pressing challenge”, mentions Cătălina Călinescu, Partner, HR & Payroll, Forvis Mazars in Romania. “Pay transparency plays a critical role in this context. When employees understand how pay decisions are made and see fairness embedded in the process, it strengthens trust, engagement and long-term retention. The new EU directive gives organisations the opportunity to move beyond compliance and use transparency as a lever for culture and competitiveness”.

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.

###

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 62

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 Romania

In Romania, Forvis Mazars has 30 years of experience in audit, tax, financial advisory, outsourcing, consulting, and sustainability. We empower over 370 people to deliver our promise to clients with confidence.

Visit forvismazars.com/ro to learn more.