Payroll under pressure as 45% of Irish employers report compliance issues

SD Worx Ireland, a leading payroll and HR solutions provider, today announces new research which has found that almost half (45%) of employers in Ireland experienced payroll-related compliance or audit issues in the past year. The figures come as employers prepare for a new round of payroll changes following Budget 2027, alongside the recent increase in PRSI rates.  

The research was carried out by iVOX on behalf of SD Worx, surveying 1,000 employees and 301 employers in Ireland. Despite 45% of employers experiencing payroll-related compliance or audit issues, 78% believe payroll is processed accurately within their organisation. More than three-quarters (77%) also say that payroll delays are rare and deadlines are consistently met.  

This suggests that payroll risk is not always visible in day-to-day operations. Payroll may appear to be functioning effectively because employees are paid accurately and on time, yet weaknesses can still exist in underlying processes, controls, reporting obligations and legislative compliance.

The findings highlight the growing challenge facing payroll teams as compliance obligations become more complex. Looking ahead, 32% of employers do not agree that their organisation can adapt effectively to new legislative and compliance requirements in payroll and HR. Payroll teams are currently adjusting to the PRSI increase that took effect at the start of this month, which raised Class A employee contribution rates and the main employer contribution rates by 0.15 percentage points. 

Budget 2027 will also bring changes to income tax bands and credits, alongside a rise in the higher-rate employer PRSI threshold from €552 to €600 per week. The introduction of pensions auto-enrolment in January and evolving pay transparency and reporting requirements show just how quickly the pay compliance environment is changing. 

As payroll becomes increasingly connected to tax, pensions, HR, workforce data and statutory reporting, organisations are navigating greater complexity while continuing to deliver accurate and timely payroll. Many organisations are reviewing how payroll is managed, with the research also showing an appetite for external payroll support. 58% of employers are already outsourcing at least some payroll tasks or sub-processes, while 66% say that this would be their preferred approach over the next three years. 

In response to demand from organisations seeking greater visibility into payroll risk and compliance, SD Worx has developed a Payroll Health Check consultancy service. MegaPay is used to pay one in five employees in Ireland, and the new Health Check is designed to assess whether companies’ current payroll processes and systems are efficient, scalable and able to support future growth without adding unnecessary risk or administrative pressure. It also examines how payroll information flows through the organisation and where complexity, compliance risk and manual intervention may have accumulated. 

The Payroll Health Check is available to existing MegaPay customers. Organisations can book a call with SD Worx Ireland to discuss their current payroll processes and the Health Check.