HR and payroll for UK businesses with 250+ employees: what an HCM platform has to handle

For businesses with more than 250 employees, a combined HR and payroll platform, often called an HCM (human capital management) platform, has to do a lot more than pay people and hold records.

It has to produce gender pay gap reports for each legal entity, run payroll across several entities and sites, control who can see and change pay data and give the board workforce figures, all from the same employee records.

Looking for a detailed view of the typical responsibilities businesses face with 250+ employees?

This guide covers the reporting duties that start at 250 employees and the data each one needs.

It then looks at running payroll across entities and sites and producing workforce figures for the board.

Closing the guide, we showcase how IRIS Cascade, the HR and payroll software developed by IRIS Software Group, handles each of these responsibilities and tasks.

Combined HR and payroll software is often described as HCM, or human capital management. The main distinction from a conventional HR system is that HCM covers a wider scope, such as core HR, payroll, talent management and workforce analytics, all in a single platform. This guide uses both terms.

Why 250 employees change HR and payroll

Reaching 250 employees marks a significant milestone as several duties begin.

Each duty requires data that sits in HR and payroll.

As such, the 250-employee threshold fundamentally changes what your HCM system has to produce.

Many larger organisations are made up of several companies owned by one parent company, often after acquisitions.

For gender pay gap reporting and action plans, each of those companies counts only its own employees.

Example: a business with 1,200 people split across three companies of 600, 450 and 150 will have two companies that must report and one that does not.

However, the directors’ report statement works differently.

Where a parent company prepares a group directors’ report, it counts UK employees across the whole group.

A subsidiary with more than 250 UK employees still needs its own statement.

Gender pay gap reporting: where HR and payroll data meet

Gender pay gap reporting is a current legal duty for employers with 250 or more relevant employees.

Under gender pay gap reporting, you publish six measures – plus a signed written statement confirming their accuracy if you’re a private or voluntary sector employer – on the Government’s UK Gender Pay Gap Service within 12 months of your snapshot date:

• Private/voluntary sector: snapshot date of 5 April, with figures published by 4 April the following year.
• Specified public authorities: snapshot date of 31 March, with figures published by 30 March the following year.

Example: a private sector employer with a snapshot date of 5 April 2026 must publish by 4 April 2027.

The six gender pay gap measures are:

1. Mean gender pay gap in hourly pay
2. Median gender pay gap in hourly pay
3. Mean bonus gap
4. Median bonus gap
5. Proportion of men and women receiving a bonus
6. Proportion of men and women in each pay quartile

These six measures can’t be calculated from HR or payroll data alone.

You need HR and payroll working together.

Example: hourly pay needs ordinary pay from payroll and working hours from HR.

The table below shows where each piece of data usually comes from.

Reporting is harder and more error-prone when HR and payroll keep separate records.

When HR and payroll sit separately, each data point has to be manually extracted and matched by hand.

Working from one employee record means the figures come from the same data that paid people.

That starts with the employee data you should only enter once.

Equality action plans: voluntary now, expected to be mandatory from 2027

Gender equality action plans should set out the steps you’re taking to reduce your gender pay gap and support employees experiencing menopause.

You publish your action plans on the Gender Pay Gap Service alongside your figures.

Each legal entity with 250 or more employees needs its own plan.

For the 2026 to 2027 reporting year, plans are voluntary, with deadlines of:

• 30 March 2027 for most public authority employers
• 4 April 2027 for all other employers

Subject to legislation, gender equality action plans are expected to become mandatory from spring 2027.

Ethnicity and disability pay gap reporting: what’s planned

The Government has committed to mandatory ethnicity and disability pay gap reporting for employers with 250 or more employees.

A draft Equality (Race and Disability) Bill was published in March 2026, but it has not yet been introduced to Parliament, and no start date has been set.

The reporting is expected to include six core pay gap metrics:

• Mean hourly pay gap
• Median hourly pay gap
• Mean bonus pay gap
• Median bonus pay gap
• Bonus proportions
• Pay quartiles

Additionally, reporting will cover data integrity and workplace context:

• Workforce composition
• Declaration rates
• Contextual action plan

Ethnicity and disability are special category data under UK GDPR.

Processing them requires an Article 6 lawful basis and an Article 9 condition (for employment purposes, usually with an appropriate policy document under the Data Protection Act 2018), plus safeguards such as limiting access to the people who need it.

Our guide to HR data security and GDPR standards covers how to set this up, and UK employment law updates for 2026 covers the wider changes.

Running payroll across entities, sites and pay groups

Running multiple payrolls isn’t uncommon for larger businesses.

Acquisitions tend to bring their own legal entities, with each one having its own PAYE reference, pay rules and reporting.

As such, your payroll platform has to handle:

• Legal entities and PAYE references: each legal entity reports separately to HMRC and pay gap figures are also calculated per entity, so every employee has to sit in the right one.
• Pay frequencies: weekly, fortnightly, four-weekly and monthly pay groups can all run side-by-side, each bringing its own pay date.
• Payroll cut-offs: HR changes have to land in payroll before each group’s cut-off, otherwise they become back pay or a correction in the next run.
• Cost centres and sites: pay costs need to map to entity, site and department, giving finance a clear view.
• Pensions: multiple pension schemes or providers can be in use at once, each needing assessment, contributions and reporting.

Our UK payroll and workforce compliance guide covers the payroll duties that apply to each entity.

Workforce reporting the board will ask for

At this business size, boards and finance directors typically expect workforce reporting, covering:

• Headcount and full-time equivalents
• Staff turnover
• Absence rates
• Total pay cost, including employer National Insurance and pension contributions

To support budgeting and pay gap reporting, you need to be able to split each figure by legal entity and site.

Workforce reporting also strengthens the case for connected HR and payroll.

When the figures come from a single record that both HR and payroll rely on, they match the pay run and the published pay gap figures.

If the data is split, it has to be reconciled manually, which takes time and risks human error.

How IRIS Cascade handles HR and payroll for larger businesses

Developed by IRIS Software Group, IRIS Cascade is HR software that features a built-in Payroll Module, so HR and payroll work from the same employee records.

How this compares with connecting separate products is covered in built-in payroll or integrated payroll.

IRIS Cascade provides one system which can be set up to manage multiple:

• Legal entities
• PAYE references
• Sites
• Cost centre and GL code structures

The HMRC-recognised Payroll Module in IRIS Cascade also supports weekly, fortnightly, four-weekly and monthly pay cycles, or a combination, and runs auto-enrolment assessment across multiple pension schemes and providers.

The standard reports within IRIS Cascade include:

• Gender pay gap
• Headcount
• Turnover
• Absence
• Salary progression

You’ll find over 50 pre-built reports, the option to create bespoke reports and dashboards for day-to-day figures.

To help keep your data safe, Cascade has role-based access controls, limiting who can view, edit or approve data, alongside audit trails that record every change, who made it and when.

While Cascade is a UK HR and payroll platform, it can hold records for employees based outside the UK.

Questions to ask before your next reporting cycle

1. Can the system produce gender pay gap figures for each legal entity directly from HR and payroll records, without exports?
2. Can it hold ethnicity and disability data with restricted access?
3. How many legal entities, PAYE references and pay frequencies can it run in one system?
4. Who can approve a pay change, and is every approval recorded?
5. Can different users have different permissions on the same employee record, so one person enters a pay change and another approves it?
6. Can I report headcount, turnover, absence and pay cost by entity and site?
7. What does implementation involve for an organisation of our size and structure?

If you’re comparing platforms by business size, see our guides to shortlisting HR software for 200 to 1,000 employees and HR and HCM software for organisations with 1,000+ employees.

HR and payroll for UK businesses with 250+ employees

Frequently asked questions (FAQs)

What HR and payroll duties start at 250 employees in the UK?

Employers with 250 or more relevant employees must publish gender pay gap figures. Employers with 250 or more employees can publish a gender equality action plan, which is expected to become mandatory from spring 2027, subject to legislation. Companies with more than 250 UK employees must include an employee engagement statement in the directors’ report. Ethnicity and disability pay gap reporting is planned.

When do equality action plans become mandatory?

Equality action plans are voluntary for the 2026 to 2027 reporting year, with deadlines of 30 March 2027 for most public authorities and 4 April 2027 for other employers. Subject to legislation, equality action plans are expected to become mandatory from spring 2027. Plans should cover steps to reduce the gender pay gap and support employees experiencing menopause.

What data do I need from HR and payroll for gender pay gap reporting?

From HR, you need each employee’s gender, legal entity, relevant employee status and working hours. From payroll, you need ordinary pay in the snapshot pay period and bonus pay for the previous 12 months. Absence and payroll records together show who was on reduced or nil pay because of leave.

How should a larger organisation control access to HR and payroll data?

Access should depend on role and location, so a site HR administrator sees only their site’s employees. The person who enters a pay change shouldn’t be the one who approves it, and an audit trail should record who changed what and when. Pay gap and special category data should be limited to the people who prepare the figures.

Do I report the gender pay gap for each company in a group?

Yes, you need to report the gender pay gap for each company in a group that meets the employee threshold. Each legal entity with 250 or more relevant employees on its snapshot date reports its own figures. A group can also publish a combined figure voluntarily, but it does not replace the separate reports.

What should a larger organisation look for in an HR and payroll platform?

Look for pay gap figures produced per legal entity from HR and payroll records. Other features include holding multiple PAYE references and pay frequencies in one system, as well as role-based permissions and full audit trails. IRIS Cascade, developed by IRIS Software Group, includes built-in payroll so HR and payroll work from the same employee records.