What CloudPay’s 2025 index reveals about the new era of fintech-driven pay

The world of global payroll is undergoing a seismic shift, forcing leaders in finance and HR to rethink the very definition of “efficiency.” The long-held belief that a perfect, first-time-right payroll run is the ultimate goal is being challenged by the demands of a more dynamic and flexible global workforce. The latest 2025 Payroll Efficiency Index (PEI) from CloudPay provides a data-rich look into this new paradigm, revealing that a drop in some traditional metrics may paradoxically signal a positive evolution in payroll strategy.

The report, a detailed analysis of the global payroll landscape, suggests that adaptability is the new benchmark for excellence. As businesses contend with diverse work models, real-time payment expectations, and complex compliance, the payroll function is evolving from a rigid administrative task into a strategic enabler of the modern employee experience.

The Global Shift Towards Flexibility

At first glance, the headline figures from the PEI might seem concerning. The global First-Time Approval (FTA) rate—the percentage of payrolls approved without changes—fell by 1.21 percentage points to 72.61%. Simultaneously, the proportion of off-cycle or “supplemental” payroll runs increased to 19%, and the average time to complete a payroll cycle grew by nearly 12% to 8.28 days.

However, the report argues this is not a sign of declining performance. Instead, it reflects a deliberate move towards accommodating necessary business flexibility. These figures indicate that payroll teams are taking the required time and making the essential adjustments to handle the complexities of today’s workforce, from ad-hoc contractor payments to last-minute changes for remote employees across different jurisdictions.

The Data Dilemma

While processes are becoming more flexible, the PEI uncovers a significant underlying challenge that fintech solutions are poised to address: data quality. For the first time, the report measures Data Input Issues (DII), revealing a stark reality. A remarkable 36.31% of all data submitted to payroll teams requires some form of cleansing or correction before it can be processed.

This single statistic highlights a major source of friction and inefficiency in the payroll ecosystem. It points to persistent issues with disconnected HR and finance systems and a heavy reliance on manual data entry, creating risks and downstream processing delays. This is the critical battleground where integrated platforms, automation, and AI can deliver the most significant impact.

A Tale of Three Regions

The global averages mask distinct regional trends, showcasing how different markets are balancing speed, accuracy, and flexibility. The full report provides a country-by-country analysis, but the regional summaries illustrate diverse strategic priorities:

• EMEA stands out as the most mature region, boasting the highest FTA rate at 83.05% and the lowest number of issues per 1,000 payslips at just 3.92. This suggests a well-established balance between process control and flexibility.
• The Americas (AMER) region saw its FTA rate fall by 3.78 percentage points. This, combined with other data in the report, points to a market that prioritises processing speed, which may come at the cost of first-run accuracy but allows for greater responsiveness.
• In APAC, the data tells a story of strategic correction. The region saw its payroll calendar length increase by a massive 23.95%. According to the report, this reflects a conscious effort to move away from previously “overly compressed timelines” to allow for more robust validation and improve overall quality.

A Modern Pay Experience

The overarching message from the 2025 PEI is clear: the future of payroll is not about returning to rigid, outdated benchmarks. It is about building a modern, resilient, and technology-driven “pay experience” that can meet the expectations of both the business and its employees. Achieving this requires a focus on integrating disparate systems, automating data validation, and leveraging APIs to create a seamless flow of information.

As Grant Tasker, Senior Director of Global Payroll at CloudPay, notes in the report’s foreword, “while payroll has ultimately become less manual, it’s arguably now more nuanced”. This nuance demands smarter, more connected solutions.

For a complete breakdown of country-level data and deeper insights into the metrics shaping the future of global pay, the full CloudPay 2025 Payroll Efficiency Index is available for download.