Payroll automation key trend in HR in 2025 - report

Peter Muchemi, CEO of FaidiHR/FILE

Africa’s human resources management automation is poised for a revolution, as the payroll function is emerging as a strategic growth driver.

Latest data from “The Future of Payroll in Africa” by FaidiHR indicates that businesses are seeking systems that enhance productivity, enrich employee experiences, and facilitate compliance with evolving and complex regulations.

Africa's payroll is at a crossroads," asserts Peter Muchemi, CEO of FaidiHR, an East Africa market leader in payroll and HR solutions.

"Payroll has been a cost center for the past several decades. However, visionary companies are now looking at payroll as a gateway to financial inclusion, talent retention, and operational efficiency."

He said governments all over the continent of Africa are increasingly instituting stricter tax regimes and statutory compliance. From Kenya's SHIF and NSSF reforms to Nigeria's evolving pension legislation, compliance is now unavoidable.

Businesses are seeking cloud-based platforms to prevent expensive penalties and manage complex regulations.

"Instead of looking for a payslip maker, our clients require a compliance partner," Muchemi states. "Automated payroll ensures that all deductions—ranging from tax to social security contributions—are accurate, timely, and transparent."

According to the report, released in August 2025, African payroll is also changing as a vehicle for financial empowerment. Salary loans, savings plans, and insurance offerings are increasingly being incorporated into payroll systems. This trend has significant implications for SMEs, which may struggle to accommodate traditional employee benefits.

"With payroll, employers can now enable their workers to access cheap loans, save, and insure themselves without the red tape of traditional banking," Muchemi says. "It's a win-win: workers get financial security, and companies improve retention."

The report also states that as the world keeps pace with mobile money penetration, payroll infrastructure in Africa is trending towards mobile-first solutions. From casual tea plantation workers in Kericho to rural developers in Nairobi for a South African business, the future is not bordered.

“We’re already seeing demand for cross-border payroll that integrates with mobile wallets and multi-currency systems,” Muchemi explains. “The future of payroll in Africa is about inclusion—paying people wherever they are, in a way they can access and trust.”

Payroll analytics and artificial intelligence will drive the next payroll innovation wave. Predictive payroll—looking ahead to anticipate the need for cash, tax forecasting, and even compliance risk signaling—will become the standard.

"Payroll information is one of the richest, but uncapped datasets for African enterprises," Muchemi asserts. "We are shifting from reactive payroll to predictive payroll, where employers can plan more effectively, employees receive their pay faster, and governments receive revenue sooner."

The pay-as-you-grow future in Africa is not about technology, the report states, replacing people—it's about enabling them. Companies that adopt this change early on will not only stay out of compliance trouble but also be ahead of the curve in terms of attracting and retaining talent.

"Payroll was previously about paying individuals—it's now about powering Africa's workforce of the future."