What will the payroll landscape be like in 2026? We believe a fundamental change is going to happen.

Payroll is generally considered a back-office function, simply there to accomplish one key task: ensuring staff are paid correctly and on time.

However, this significantly underestimates the value that payroll professionals can provide.

By utilizing technological advancements, payroll moves out of the back office and takes its rightful place as a strategic contributor to business success.

To help you on your journey, this article will detail the top payroll trends you need to watch for in 2026, exploring what they mean for you and your business.

Moving away from historical payroll processes

Payroll has always been a rigid beast, defined by strict processes and even stricter deadlines.

Well, things are changing now.

Through the use of smarter technology, payroll professionals enjoy much more freedom; technology loosens the reins, making the whole process more adaptable to real life.

Here’s how this flexibility manifests itself in three key areas:

1) Artificial Intelligence (AI)

Let’s talk about the elephant in the room.

AI is the buzzword on everyone’s lips.

Over the past few years, AI has evolved from a speculative “future trend” to something we are expected to understand, evaluate, and rapidly deploy.

However, behind this hype lies a more concrete reality: AI is not magic.

Like any technology, AI is a tool and its value depends entirely on how it is used.

The current state of AI in payroll

During a recent webinar, we asked our payroll experts their views on AI, to which they responded: “As for Large Language Models (LLMs), they don’t handle numbers very well – it’s getting better, but they don’t have a built-in calculator, so they learn to do mathematical calculations based on written instructions.

“So if you ask AI how much someone’s sick pay should have been, it’s not entirely accurate.

“In terms of how we currently use it in payroll, one of the most interesting use cases I’ve seen is where there is a set of standard operating procedures (SOPs) – your processes around payroll and how they’re done – that are used alongside Microsoft CoPilot.

“All these files and folders are placed in a SharePoint site, and CoPilot’s AI then finds the information, so you can ask it questions, significantly speeding up some of your administrative tasks.

“The way I see AI being useful in the future is that it will remove the routine tasks and mundane parts of the payroll process, so you can replace them with higher value-added services, such as payroll consulting.”

Payroll professionals are rightly cautious because implementing AI means managing change in an industry where tolerance for error is extremely low.

We believe the benefits of AI only materialize when payroll teams remain firmly in the driver’s seat.

2) Automation

If AI is the future, automation is the engine of the present.

Modern software has revolutionized the daily lives of payroll professionals, taking over mundane, time-consuming tasks.

Instead of spending hours entering data and performing manual checks, automation handles things like:

• HMRC submissions: Automatic sending of Full Payment Submissions (FPS) after each pay cycle
• Tax Code Updates: automatically retrieve and apply HMRC notifications
• Professional policies: configure sick pay or overtime rules only once, so that the system applies them automatically

This change significantly reduces errors and allows you to focus on more value-driven work, rather than just processing data.

3) Faster payments

The traditional three-day BACS cycle has significantly restricted payroll professionals.

With providers, like IRIS, now offering Faster Payments integration, payroll professionals have much more freedom when paying their employees.

This flexibility is a game changer for handling last-minute adjustments.

Now, if you notice an error or need to make a late payment, you’re no longer hostage to bank processing times.

Defending financial well-being

There is a huge opportunity for payroll teams to become champions of employee financial well-being.

In a difficult market where companies are fighting to retain their best employees, the discussion around employee benefits takes center stage.

Consider statistics like:

• 69% of employees say a wide range of benefits would increase their loyalty
• 80% of people who are satisfied with their benefits report greater job satisfaction

Payroll is at the heart of this change.

Earned Wage Access (EWA)

Earned Wage Access, also known as on-demand pay, gives employees the ability to access a portion of their salary before payday – an essential tool for reducing financial stress.

EWA’s aim is to align salaries with the reality of modern life, providing staff with the flexibility to manage unexpected costs without resorting to high-interest loans or credit cards.

Today, we see growing demand from workers for EWA.

Our recent research found that almost half (47.9%) of respondents said that the EWA makes a job more attractive.

This number is skyrocketing among younger generations, reaching 55.8% for 16-24 year olds and 65.5% for the 25-34 bracket.

Additionally, two-thirds of respondents said they would use EWA if they had access to it.

Provide access to earned wages

To offer flexible compensation, you need an earned wages access platform that syncs with your current payroll software.

Once implemented, employees work their shifts normally and accrue income.

Employees can then access their funds – often up to 50% of their accrued salary – almost immediately or within hours via a mobile app or online platform.

When payday arrives, the amount advanced is subtracted from their regular salary, along with any applicable fees.

Evolution from processor to strategic leader

The evolution of payroll will extend well beyond new tools, fundamentally changing the way professionals operate.

With technology automating the administrative burden, there is a tremendous opportunity for payroll professionals to step up and claim a well-deserved seat at the leadership table.

First, the labor market has fundamentally changed:

• More and more employees are looking to work flexibly from abroad
• Employers tackle skills shortage by hiring from abroad
• Businesses expand into new territories

While all of these scenarios make payroll much more complex, they also give the payroll function greater strategic importance, with your expertise helping to support compliance and growth.

Additionally, we are increasingly seeing payroll managers being relied upon to provide vital information on:

• Labor costs
• Risk profiles
• Legislative changes
• Operational resilience

The power of payroll data

Your payroll data is incredibly powerful.

When analyzed proactively, your data can tell a compelling story about the business, revealing workforce trends, cost drivers, and operational friction points.

For example, overtime trends can signal possible resource shortfalls, while recurring manual adjustments can indicate a broken process that needs to be fixed.

Additionally, payroll professionals are at the heart of promoting fairness and transparency.

Your data is crucial to supporting equal pay audits, gender pay gap reporting, and broader diversity, equity, and inclusion (DEI) commitments.

The role of technology

Used well, your payroll data allows you to play a significant role in long-term strategy.

The key phrase here is: when used correctly.

For many, reporting is an extremely manual task that involves extracting information from different sources and spending days manipulating it into a usable format.

This is where good payroll software makes the difference.

Modern tools provide access to dozens of ready-to-use reports, covering everything from legal requirements to strategic workforce analysis.

Plus, when your payroll and HR systems are integrated, data is updated in real time, meaning your reports are always based on the most recent information.

By leveraging this technology, you can spend less time creating reports and more time analyzing them to provide the strategic insights executives need.

A strategic future for payroll

There are a lot of changes on the horizon when it comes to payroll, but it’s not something to fear.

It’s an exciting time, providing a brilliant opportunity for payroll professionals to evolve, develop and move into more strategic roles.

The future of payroll is incredibly bright, but it requires preparation today.

By embracing these changes, you can lead innovation and thrive in a profession that is becoming more dynamic and valuable than ever.

In a MAT, one cannot escape reforecasting. But how responsive does it feel and how happy are you with the result?

Fortunately, remaking forecasts doesn’t necessarily mean falling behind. This also doesn’t mean you should devalue trust outcomes. With the right approach and tools, this can become an opportunity to refocus, strengthen teams and protect high standards.

So, if you want to get the most out of reforecasting, where do you start? This blog is a good place. It draws on the concrete expertise of our Smarter Schools: Budgeting for Impact webinar, where industry leaders shared winning strategies. We will also look at how a technology-driven approach can make reforecasting in MAT much easier.

Top 10 Ways MATs Can Repredict for More Success (and Less Stress)

1. Put your confidence vision at the center of everything

If there is one thing that is absolutely essential to a MAT, it is clarity of purpose. If you need to rebudget, this is your North Star. So, before you make your forecast again, ask yourself: “What are we here to achieve?” Let your trust’s vision guide every adjustment, ensuring that the reforecast aims to realign – not abandon – your strategic direction.

Peter Hughes, The Mossbourne Federation CEO said: “If you don’t know what’s important to you, you have no chance of managing your resources. For me, that means teaching and learning – and I want my children to live in a high quality building, so I leave money for that.”

How can digital tools help?

You can protect a MAT’s aspirations with modern digital tools, such as IRIS Financial Planner. This way, you can create multiple budget scenarios and compare their impact before committing.

2. Be transparent and inclusive

If there’s one thing that can do wonders during a reforecast, it’s transparency. This builds trust and helps everyone focus on the same goals.

So, involve your team in the process. Share the numbers, challenges, and rationales for each decision.

How can digital tools help?

It is very important to democratize data, which means providing access and clarity to it. With the right software, finance managers can share consolidated reforecast views, while business leaders benefit from role-specific access to assumptions, allocations and variances. If your solution integrates with the rest of your system, it can bring together financial, attendance, results and human resources data.

3. Use data to reduce reactivity

When you’re remaking your forecast, how can you make sure you’re not too reactive? Use real-time data and anticipate where adjustments might be needed. Timely diagnostics allow you to make thoughtful strategic changes rather than hasty, reactive cuts.

Bless Yue The CFO of River Learning Trust said, “Being strategic means looking at different investment horizons. Skate to where the puck is going to be, not where it has been.”

How can digital tools help?

If there’s any sign that you’re using good technology, it’s in the way it presents current information. The best tools can quickly detect overspending or savings. Automatic updates also have a role to play, as they keep you aligned with the latest pay scales and NIC rates. This way, diagnoses are not skewed by outdated assumptions.

4. Be prepared for any new reality

Revamping forecasts isn’t just about cutting budgets. Sometimes, for example, the process also requires reassessing how your organization operates. Do you need to rethink roles, operating models and even program structures to adapt them to new realities?

How can digital tools help?

Sometimes you need tools to help you reorganize. Good digital solutions like IRIS Financial Planner can do this. For example, they can help you move from one GAG ​​budget model to another, to a top-down budget, or to a hybrid budget. You can safely test structural changes, such as centralizing certain costs or redesigning roles, while keeping your organization agile and focused on impact.

5. Build relationships and join forces – even with other trusts

Teamwork makes the dream work…and that includes between “rival” trusts. Working with other organizations can go a long way in saving money. Just make sure you have a solid plan first. When reforecasting, look for opportunities to combine efforts, exchange skills and build partnerships that enhance your trust’s ability to achieve its objectives.

Corey Bateman, The Pioneer Learning Trust CEO said: “Relationships have played an important role in helping us avoid overspending, while still delivering the highest possible level of skills into our schools and our trust. »

How can digital tools help?

If you want to create a solid foundation for a partnership, data will provide much-needed support. It identifies areas where there is a need, areas where money could be saved, and areas where resources could be shared by your trust in exchange for help.

6. Save time with technology

The gold dust of a MAT is time and resources. So how can you protect them? Use technology to streamline reporting, automate routine tasks, and provide real-time insights. This allows leaders to focus on strategy and improvement, even when budgets are tight.

How can digital tools help?

If you’ve ever imagined a life without work, then good digital tools will get you there. For example, our connected suite (IRIS Central, Invoice Matcher, PlusPay, Every HR and Every Payroll) automates routine tasks and expands insights in real time, giving leaders more time for strategic priorities.

7. A modern culture can adapt to change

If you want your teams to adapt more easily to financial changes, creating a culture of innovation and improvement will better equip staff. Encourage your team to view reforecasting as an opportunity to learn, innovate, and improve.

How can digital tools help?

If you want employees to think about the future, they need information. With digital technology, you can reforecast monthly or quarterly. Comparing “plan, reforecast and reality” helps teams anticipate and adapt quickly.

8. Be smart with your cuts

Taking action is important, but sometimes restraint is just as essential. Avoid the temptation to make sudden, blanket cuts. Instead, use data and benchmarking to identify areas where adjustments will have the least impact on your mission – and where investments are still needed to make progress.

Stéphane Morales, The CEO of the Institute of School Business Leadership said: “What we see so often is people taking a very heavy-handed approach to efficiency savings.

“But did they cut in the right place, at the right time?

Otherwise, he added, budget cuts “will bite them later, and you could find yourself in a downward spiral.”

How can digital tools help?

It’s time to see the big picture And the fine detail. Trust-wide summaries and in-depth school-level analyzes help you direct savings where the impact is lowest and protect priority investments.

9. Empower your employees

If you want to encourage initiative at the school level, these leaders need to take action. Give them control, but within defined parameters. This keeps the energy and innovation alive, even as you adapt to new financial realities.

How can digital tools help?

Settings at the MAT level can help you set boundaries, while directors and SLTs adapt to their context. Permission-based sharing ensures that the right people see the right data and can act quickly without losing governance control.

10. Discover the IRIS financial planner

You’ve heard lots of great ideas from our webinar’s industry expert guests. Here is a technical tip from IRIS.

IRIS Financial Planner helps Multi-Academy Trusts (MATs) rethink their forecasts with confidence and strategic clarity.

Simplify scenario planning

Create and compare multiple budget scenarios that match your trust’s goals. Whether you prioritize SEND provision or program investment, this shows the impact of each approach before you make your decision.

Get real-time, synchronized accuracy

IRIS Financial Planner is directly linked to IRIS Financials, which allows you to reconcile your projects with actual expenses. Automatic updates ensure your data reflects the latest pay scales and rates, so analyzes and forecasts are always accurate.

Promote transparency and collaboration

Easily share your views and assumptions with your team to drive transparency and inclusive decision-making. Role-based access ensures that everyone sees the information that concerns them.

Enable rapid thinking and continuous improvement

Run monthly or quarterly updates, compare “plan, update and reality” and quickly adapt to changing circumstances.

With IRIS Financial Planner, reforecasting becomes a strategic opportunity and trusts can stay focused on great results.

Click here to learn more.

Watch the webinar, get insights

Smarter schools: budgeting for impact, not just survival, is available now, upon request.