India Leads Global AI Adoption in Payroll with 34% Planning Implementation

The report from HR solutions provider ADP said that AI use in India is expanding across critical payroll functions, with around half of companies applying it to automate workflows, streamline data entry and calculate taxes, benefits and overtime.

Additional areas being explored for AI transformation include audits, compliance management and data validation, the report further said.

"In India, payroll sits at the intersection of scale and scrutiny. Organisations are prioritising stronger controls, audit readiness, and high-quality data to support decision-making. As AI takes on repeatable tasks, payroll teams will shift their focus to data integrity, regulatory navigation and governance excellence," said Rahul Goyal, Managing Director, ADP India and Southeast Asia.

The firm highlighted skills shortages challenging payroll teams in Asia Pacific region (APAC), noting 80 per cent of organisations are reviewing how to run payroll with fewer people, above the global average of 72 per cent.

Reskilling and upskilling are top-of-mind priorities to address this, with around 74 per cent payroll leaders in APAC reporting that staff shortages have already impacted their payroll operations.

Around 49 per cent of respondents were exploring AI to support leaner operating models and 33 per cent of organisations identified AI as a key driver of payroll transformation over the next 2-3 years, the report further said.

Organisations are primarily using AI to detect fraudulent transactions, accelerate report generation, and automate data entry, the firm noted.

Around 79 per cent of organisations said data security regulations are slowing AI adoption, while 51 per cent of respondents wanted payroll teams to spend more time strengthening data security practices, through new policies, safeguards, and continuity plans.

- IANS