Traditional pay cycles fading as AI and automation drive payroll change

Traditional weekly and monthly pay cycles are moving towards extinction as AI, automation and APIs reshape payroll systems worldwide, according to CloudPay’s 2025 Payroll Efficiency Index (PEI).

The study found that global calendar lengths – the number of days taken to complete a payroll cycle – rose by 12% year-on-year to 8.28 days, signalling a shift towards greater flexibility and enabling more frequent or on-demand pay.

CloudPay also reported a 1.43% rise in supplemental runs, meaning more payroll processes are happening outside fixed cycles.

Carlos Morato, director of operations, AMER, said: “The PEI data reveals fascinating global divergences in some of the core metrics we monitor, including issues per 1000 payslips, first-time approval ratings, and data input issues, amongst others.

“However, the data all points back to one core element: that global payroll is shaking free of its traditional constraints, and is embracing a more dynamic and agile future.

“Organisations have historically been tied to weekly or monthly pay cycles, but the rise of emerging technologies is supporting real change in the very fabric of the industry and profession, and supporting more flexibility, which will only benefit businesses and their employees.”

He added: “The move to more flexible pay cycles is being supported by the rise of the three A’s: AI, automation and APIs, which are offering far greater potential for organisations to adapt to external events, and the specific needs of the business, rather than being tied to rigid pay cycles.

“The growth of automation, in particular, is picking up a significant proportion of the arduous, time-consuming tasks that professionals had previously been focused on, and enabling employers to be more strategic and adaptive in their actions.

“Equally, changing employee demands and a growing need for access to more flexible employment models are also evolving the status quo, and could lead to traditional cycles becoming obsolete.”

Morato said companies adopting more innovative pay models could use the shift to boost recruitment and retention, adding: “These types of changes mean that the future is looking increasingly bright for global payroll, and the shift away from fixed pay cycles can offer a huge number of benefits to adopting organisations and their employees.”