Payroll Year End (PYE) 2026: addressing common pitfalls 

As April 2026 approaches, the familiar dread of Payroll Year End (PYE) will surely be setting in for some.

After all, the looming reporting deadlines and mountain of admin can put even the most seasoned payroll professionals under pressure.

Well, what if this year could be different?

To help you get ahead and tackle this PYE with confidence, we’ve put together a list of common pitfalls you’ll want to avoid to keep your processes stress-free.

Disparate data

Accurate data is the bread and butter of a smooth Payroll Year End.

However, keeping on top of your data can be tricky, especially as employee information frequently changes.

People move house, switch bank accounts, tax codes get updated and salaries are adjusted.

If you’re keeping these records in separate systems – or worse, spreadsheets – the risk of something slipping through the cracks is massive.

Now, incorrect data doesn’t just mean a headache for you; data errors can lead to wrong tax calculations, underpaid staff or even compliance fines – the last thing you need when you’re already busy.

How to improve your payroll data

To get your data in shape, you have two main options.

First is taking a rigorous, manual approach – this means regularly auditing your payroll data to hunt down errors before they become problems.

A manual approach can be effective, but it eats up an enormous amount of time.

The smarter, time-saving route is payroll and HR software integration, creating a single source of truth.

Why software integration is a game-changer

Software integration uses something called an Application Programming Interface (API).

Think of an API as a digital bridge that enables your systems to exchange information.

For example, with integration, if an employee updates their new address in your HR platform, the API instantly sends that information across to your payroll software.

You don’t have to type it in twice, and you don’t have to worry about typos.

Excessive admin

During Payroll Year End, it can feel like you’re spending all your time on paperwork.

You have to conduct a full review of all your payroll records and processes to make sure everything lines up with HMRC’s requirements.

This requires a deep dive to ensure compliance.

On top of that, you’ve got the mountain of other tasks:

• Meticulous record-keeping for every single employee
• Preparing and distributing P60s to all staff members on time
• Making sure all your finalised payroll data is submitted correctly through Full Payment Submissions (FPS) and Employer Payment Summaries (EPS)

Relying on manual processes for all this just adds unnecessary pressure and opens the door for costly mistakes.

How automation lightens your load

Relying on software greatly reduces the risk of errors and saves a huge amount of time.

Instead of manually tackling every task, software automation can take the weight off your shoulders.

Modern payroll software can handle the heavy lifting, from automatically generating and distributing P60s to ensuring your FPS and EPS submissions are correct and on time.

Tax changes

Tax codes are the small but mighty numbers that decide how much tax is deducted from an employee’s pay – a concrete understanding is crucial for Payroll Year End.

While on the surface, tax codes may seem simple, they can regularly change, creating major headaches for both you and your staff.

Why do tax codes change?

An employee’s tax code can be updated due to shifts in their personal allowance, changes to company benefits or a direct update from HMRC based on their individual tax situation.

These updates occur as P9 notices from HMRC at any time throughout the year, requiring businesses to remain vigilant.  

Crucially, when the new tax year starts on 6 April, you must check the P9X guide. 

Missing this step is a common mistake that can throw your first payroll run of the year into chaos.

How to stay on top of tax changes

One method to keep on top of tax changes is to establish a process that tracks and implements these changes accurately.  

Training staff to help them understand their tax codes can be effective and help them spot any discrepancies. 

Of course, the easiest way to manage tax changes is with good payroll software.

The right system can automate these adjustments for you – when HMRC issues new tax codes, the software can apply them automatically, which dramatically reduces the time you spend on manual updates and minimises the risk of errors.

The Payroll Year End (PYE) Survival Guide 2026

Hopefully, the above has offered a starting point for tackling Payroll Year End 2026.

Looking for further support? Our 2026 Payroll Year End Survival Guide is on hand to help.

The guide offers tips and advice, covering:

• What is Payroll Year End?
• Understanding the risks
• Payroll Year End survival tips
• Frequently asked questions
• And more