New Forvis Mazars research identifies compliance, accuracy and visibility to reshape payroll performance across Europe

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.

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. 

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.

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.

We advocate 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.

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.

Our 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.