07/09/2026
YOU CAN WORK EVERY HOUR YOU’RE ASKED TO WORK...
AND STILL BE PAID WRONG.
That sounds dramatic.
The numbers are worse.
I’ve spent quite some time analysing UK payroll data, employee research and Government enforcement records for the 2025/26 tax year.
There is no single official Government statistic that tells us exactly how many UK employees were paid incorrectly.
But when the available evidence is brought together, my best considered estimate is this:
Around 1 in 10 employees have received the wrong amount of wages from their employer at least once during the tax year.
When the definition is widened to include things such as wrong deductions, late pay, tax-code issues affecting take-home pay and other payroll inaccuracies, the evidence suggests the figure could be closer to:
1 in 4 EMPLOYEES - that's 25%!
Think about that for a moment.
In a business employing 100 people, that could mean around 10 people receiving the wrong amount of money at some point during the tax year; rising to 25 of the 100 people, when the definition is widened to include things such as wrong deductions, late pay, tax-code issues and other payroll inaccuracies.
But, payroll isn't just numbers on a spreadsheet...
It's somebody's:
Mortgage.
Rent.
Food shopping.
Childcare.
Direct debits.
Petrol.
Electricity bill.
Life.\
Now look at what happened with National Minimum Wage.
During the 2025/26 tax year, 3 Government naming rounds publicly identified:
1,398 employer entries.
Around 162,000 workers who had been underpaid.
More than £20.7 MILLION in wages that should have been paid to those workers.
These were naming rounds published during 2025/26; some of the underlying underpayments and investigations relate to earlier periods.
And it gets worse...
In just 2 of those naming rounds, October 2025 and March 2026, Government figures show:
880 employer entries.
Approximately £13.3 million in wages owed.
£22.8 MILLION in financial penalties...
That works out at roughly £41,000 in arrears and penalties per named employer entry on average across those 2 rounds.
And then there is the cost that doesn't appear anywhere in the Government figures...
YOUR COMPANY NAME!
Once an employer is publicly named by Government for failing to pay workers the legal minimum wage, what is the financial value of the damage to its reputation?
There isn't a reliable number.
Potential employees can see it.
Existing employees can see it.
Customers can see it.
Suppliers can see it.
Procurement teams can see it.
Competitors can see it.
Google remembers rather longer than most businesses would probably prefer.
That reputational damage isn't included in the £41,000 figure.
It can't be reliably quantified, because the consequences will be different for every employer.
But once your company name has been publicly associated with underpaying its workers, you don't get to choose who sees it.
And here is one of the problems I find particularly frustrating.
Some payroll errors are introduced before payroll has even started calculating anything.
Imagine HR changes someone's salary, hours, pension or another piece of employment information.
They enter it into the HR system.
Then somebody in Payroll has to type exactly the same information into a completely different payroll system.
Same employee.
Same information.
Typed twice.
Every time information is manually entered again, you create another opportunity for:
1 wrong digit.
1 missed effective date.
1 forgotten change.
1 incorrect number.
Or 1 piece of information simply never reaching Payroll.
Research into manual data entry outside payroll has found a pooled single-entry error rate of around 0.29% per field.
That sounds tiny.
But put 8 pieces of information into a transaction and the modelled chance of at least 1 field being entered incorrectly becomes about 2.3%.
Type those same 8 pieces of information into another system and you've created another opportunity for exactly the same thing to happen.
My view is quite simple:
If information has already been entered correctly into HR...WHY ARE WE THEN TYPING IT INTO PAYROLL?
The safest 2nd data entry is the 1 that never happens.
That's 1 of the reasons I've designed PeopleFlow and WageFlow to work together.
PeopleFlow is designed to hold the authorised HR information, with WageFlow receiving that information without somebody having to manually type it all again.
WageFlow doesn't then simply calculate payroll and assume everything must be correct because the maths worked.
It looks for EXCEPTIONS.
It also looks for ANOMALIES.
There's an important difference.
An exception can tell you something looks wrong TODAY.
An anomaly can tell you that something which looks perfectly reasonable today has become unusual when compared with that employee's previous pay.
That's the type of problem that can quietly repeat month after month because nothing in 1 individual payroll looks obviously ridiculous.
And National Minimum Wage?
WageFlow already checks for NMW risk when somebody is entered through the New Starter process.
I've now added another control to WageFlow.
Before payroll can finally be approved, WageFlow will perform another NMW compliance assessment after salary sacrifice and other deductions or adjustments that legally affect pay for National Minimum Wage purposes have been taken into account.
Because checking somebody was legally paid enough when they joined the company isn't much use if something changed 6 months later.
No payroll software can honestly promise that human beings will never make another payroll mistake.
My software won't make that claim either.
But if an error risk exists because 2 systems don't communicate...
Stop typing the information twice!
If an error can be identified before payroll is approved...
Surface it and correct it!
If something looks normal this month but abnormal over 6 months...
Flag it!
And if someone's wages are about to fall below the legal minimum...
DON'T discover it when HMRC does!
Preventing the mistake is considerably cheaper than explaining it afterwards.
SOURCES:
UK payroll-error evidence review: the evidence synthesis found no official single 2025/26 employee payroll-error statistic; its reconciled estimates are approximately 10% for employer wrong-cash-payment events, with a plausible 6–15% range, and approximately 25% for the broader employee-outcome definition, with a 15–35% range.
Department for Business and Trade / HMRC, National Minimum Wage Naming Round 21, 29 May 2025: 518 employers, nearly 60,000 workers and more than £7.4m arrears.
Department for Business and Trade, National Minimum Wage Naming Round 22, 17 October 2025: around 42,000 workers, approximately £6m arrears and £10.2m penalties.
Department for Business and Trade / HMRC / Fair Work Agency, National Minimum Wage Naming Round 23, 19 March 2026: 389 employers, around 60,000 workers, more than £7.3m arrears and £12.6m penalties.
Low Pay Commission Report 2025: measured minimum-wage underpayment increased from approximately 382,000 workers in April 2024 to approximately 445,000 in April 2025.
Garza et al., systematic review and meta-analysis of manual data-processing methods: pooled single-data-entry field error rate approximately 0.29%. This is used here solely as an illustrative rekeying-risk model, not as a measured UK payroll error rate.
May 2025 NMW naming round:
https://www.gov.uk/government/news/over-74-million-put-back-in-working-peoples-pockets-by-employers
October 2025 NMW naming round:
https://www.gov.uk/government/news/6-million-repaid-to-workers-as-government-cracks-down-on-employers-underpaying-their-staff
March 2026 NMW naming round:
https://www.gov.uk/government/news/hundreds-of-employers-handed-penalties-for-illegally-underpaying-workers
Low Pay Commission Report 2025:
https://www.gov.uk/government/publications/low-pay-commission-report-2025/low-pay-commission-report-2025-html
GOV.UK NMW enforcement guidance:
https://www.gov.uk/guidance/calculating-the-minimum-wage/enforcing-the-minimum-wage
The minimum wage can be enforced by HM Revenue and Customs (HMRC) compliance officers or by a worker making a claim in an employment tribunal or court.
