AI, pay transparency, and crypto: 5 payroll trends to watch this year

Payroll isn’t something most people think about — until there’s a problem. But with artificial intelligence (AI) transforming how payroll is processed, employees demanding more flexibility on how and when they’re paid, and new regulations bringing more transparency to salaries, businesses need to be proactive moving forward.

In this article I’ll talk about some of the main payroll trends we’re likely to see develop this year, and how your business can stay ahead of the curve. So let’s dive straight in.

1. On-demand pay and the cost of living crisis

Since around 2022, when a cost of living crisis was well underway all across the globe, requests for on-demand pay shot up.

On-demand pay allows employees to access their earned wages before the traditional payday, giving them more financial flexibility. It helps workers cover unexpected expenses without relying on high-interest loans or credit cards.

What about a global rollout for bi-weekly pay too?

In places like the US, bi-weekly pay is considered the most common payroll frequency, but in somewhere like the UK, social security laws mean that for bi-weekly pay to become a norm, social security rules would need to be updated too. This makes it more complicated to implement, but for employers who can offer that flexibility to help their people, it’s a potentially huge win. 

2. Cryptocurrency payment options

Crypto payments have gained significant traction, with a 2022 survey finding that 36% of employees want (or would be willing) to be paid in cryptocurrency, while a 2024 survey revealed that 60% of freelancers have been paid in cryptocurrency at least once. This showcases the rising popularity of digital currencies in the gig economy, as well as a wider desire for efficient and cost-effective compensation options.

• How does cryptocurrency payroll work? In essence, this type of payout option is just a different way of distributing net pay, which typically happens through the banking system and is paid in local currency. With crypto payments, the payment is instead distributed through a cryptocurrency of the employee’s choice, usually with a third-party broker involved.

The increasing global awareness and acceptance of cryptocurrencies make them an attractive option for many sectors. Plus, the integration of blockchain technology and smart contracts has boosted the accuracy and transparency of payroll processes, making crypto-based payroll more feasible.

Did you know? In Argentina, the number of companies paying their employees partly in crypto increased by 340% over the last year? This makes it the country with the highest percentage of crypto-paid employees globally.

Why is cryptocurrency payroll controversial?

Of course, paying employees in cryptocurrency can present several challenges. The most obvious issue is the volatility of cryptocurrency values, which can lead to fluctuations in the actual compensation employees receive. 

In addition, regulatory and tax implications surrounding cryptocurrency payments are complex and vary by jurisdiction, potentially leading to compliance difficulties for both employers and employees. 

The acceptance and usability of cryptocurrencies are not yet universal either, limiting employees' ability to utilize their earnings effectively. On top of that, the largely unregulated nature of cryptocurrency means there are fewer protections in place, leaving employees vulnerable to security risks, fraud, or lost funds with little recourse.

Can employers meet compliance needs with crypto payroll?

From an employer compliance standpoint, with the right withholdings or tax being deducted depending on jurisdiction, you’d still technically be meeting compliance requirements for payroll when paying out in a cryptocurrency. 

However, when a third-party crypto broker becomes involved to facilitate the payments, there is a potential grey area in terms of responsibility should something go wrong, like a crypto wallet going missing.

3. Ever-changing compliance requirements

Payroll compliance never stands still, and this year is shaping up to be another year of regulatory twists and turns. With new laws, digital transformations, and evolving workforce trends, businesses must keep pace or risk fines.

From stricter data protection requirements to real-time payroll reporting mandates, staying compliant demands more preparation, vigilance, and the right payroll systems now. 

Regulations vary from country to country, and as governments refine tax laws, redefine worker classifications, and tighten data security, businesses will need to work with the right partners to avoid penalties — especially if their workforce operates in different locations. 

This year, expect to see an increase in real-time payroll reporting requirements, tighter contractor-versus-employee classification rules, and more rigorous tax compliance checks. Companies should make sure their payroll systems are equipped to handle these changes.

4. Pay transparency (is everyone finally talking about salaries?)

Pay transparency is shifting from a workplace perk to more of a global expectation. From Fortune 500 boardrooms to fast-growing startups, companies are pulling back the curtain on salaries in a bid to build trust, close wage gaps, and attract top talent. 

According to Reed, job postings that include salary ranges receive 60% more applicants than those that keep compensation a mystery. And recently, countries like Germany, Canada, and Japan have introduced stricter pay transparency laws, following the lead of early adopters like Norway and Sweden. 

Even in the US — where compensation secrecy once reigned supreme — major corporations are voluntarily disclosing pay bands to stay competitive. But not everyone’s on board with this. Some executives worry that increased visibility could spark internal tensions and higher payroll costs. 

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The EU Pay Transparency Directive

In June 2023, the European Union (EU) Pay Transparency Directive came into play, setting a new benchmark for salary openness across Europe. The directive requires employers to disclose salaries upfront during recruitment and respond to pay data requests, aiming to close wage gaps and promote fairer workplaces. 

While EU member states have until June 2026 to incorporate these rules into their national laws, the ripple effects are already being felt beyond the bloc. For example, UK companies — despite no longer being bound by EU regulations — face mounting pressure to align with these transparency standards to stay competitive and maintain employee trust. 

As multinational organizations adjust their policies to comply with EU rules, many UK-based employers may find that embracing pay transparency is both a legal necessity elsewhere — and an expectation everywhere.

Closing the gender pay gap

Salary transparency is also gaining traction as a way to promote fairness and attract top talent. By openly sharing pay details in job ads — rather than vague “dependent on experience” statements — companies can help close the gender pay gap too. 

Without relying on salary history, which often disadvantages women, employers can make compensation decisions based on skills and market rates instead. 

5. AI automation and self-service tech 

Throughout this year and beyond, AI-driven payroll automation and self-service HR tools will continue to take the stress out of payday and paperwork. AI is already handling complex payroll tasks, catching errors, and boosting payroll accuracy, often saving companies from expensive mistakes.

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At the same time, self-service HR platforms let employees update their own info and access pay details without waiting on HR, which means fewer emails, less stress, and a significantly improved employee experience.

Payroll isn’t just evolving — it’s changing

As you can see, the way people get paid is changing. AI is reducing payroll errors, automating compliance checks, and streamlining payment processing. Self-service payroll tools are giving employees greater control over their earnings, while real-time payroll reporting is helping companies stay ahead of compliance requirements. And pay transparency is gaining momentum worldwide, driven by new regulations and employee demand for fairer wages.

To ensure you’re “staying with the times” and running payroll in a way that is smooth, efficient, and economic for both you and your people, it’s crucial to partner with a payroll provider that understands these trends and provides a seamless experience.

To learn more about Remote Payroll and how we can support your business — wherever your employees are based — speak to one of our friendly experts today.

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