As India’s businesses continue to sustain steady economic growth, HR and payroll departments in 2025 are placing greater emphasis on employee financial well-being. According to ADP’s Future of Pay in India 2025 report, 46% of organisations in India have made expanding financial well-being programs their top priority to better support employees. 

The report underscores the growing recognition of financial stress as a significant factor affecting employee productivity, engagement, and retention. More than half (55%) of surveyed business leaders identified reducing financial stress as a key area where payroll systems can enhance employee experience.

Rahul Goyal, Managing Director of ADP India and Southeast Asia, stated, “Financial well-being isn’t just about increasing salaries; it’s about equipping employees with the right knowledge and tools. When employees understand financial, tax, and payroll processes from the outset, they are better positioned for long-term financial security. Regular coaching and education sessions can further empower them to make informed financial decisions.”

Key Findings from the Report

Financial Well-being as a Strategic Priority: Companies are adopting flexible pay models, salary-linked financial support, and personalised benefits tailored to employees’ life stages. Nearly 30% of organisations are introducing flexible pay structures, including performance-based compensation and access to loans, to offer greater financial flexibility.

Navigating Compliance Complexities: With 65% of payroll leaders finding compliance risk management highly challenging, businesses are under pressure to keep up with evolving tax structures, multi-state regulations, and the upcoming wage code reforms. This is driving a shift towards automated governance frameworks and payroll technology solutions.

Payroll Modernisation: Organisations are investing in advanced payroll technologies to boost efficiency, improve data integration, and enhance security. Employees now expect payroll systems to offer consumer-grade user experiences, with modern functionalities to navigate compliance complexities. However, challenges remain—30% of organisations cite scalability and customisation as obstacles, while 28% struggle with high implementation costs. As a result, only 12% of organisations report having a payroll function fully prepared to support future workforce demands.

Goyal added, “The payroll conversation has evolved—it’s no longer just about timely salary payments but a crucial touchpoint for employee well-being, business agility, and trust. As regulatory complexities and workforce expectations rise, leaders must rethink traditional payroll processes to stay ahead.”

The report highlights an urgent need for payroll modernisation—not only for efficiency but to ensure compliance readiness and meet growing employee expectations. ADP aims to help organisations leverage technology and insights to transform payroll into a strategic advantage in today’s rapidly evolving business environment.

Conducted in collaboration with People Matters, the annual survey gathered insights from over 300 HR, payroll, and finance leaders to understand how Indian businesses are adapting their payroll strategies to workforce demands. To download the full report, click here.