Did you know that the average cost of a data breach in the UK is £19,400? With so much personal data involved in payroll processing, keeping it secure should always be a top priority. Successfully managing payroll security comes down to three things: having robust security measures in place (such as data encryption and multi-factor authentication), implementing best practices (like regular system audits and employee training), and knowing how to react in the event of an incident.
If you’re interested in learning how to manage payroll security, you’ve come to the right place.
The importance of having robust payroll security measures
Implementing strong security measures is absolutely crucial because payroll data contains highly sensitive information, including your employees’ bank details and personal records.
Your people expect their payroll information to be handled with the highest level of security. Failing to do so can damage trust in your organisation.
If this data were to fall into the wrong hands, it could lead to serious consequences, from fraud and identity theft to stress and panic among your employees.
What are the keys to having reliable payroll security measures?
- Implementing multi-factor authentication (MFA).
- Encrypting your data both at rest and in transit.
- Following a zero-trust principle—restricting access only to those who truly need it.
Here’s a list of payroll security accreditations that help keep your data safe:
- ISO 27001: international standard for information security management.
- ISO 27701: extension of ISO 27001 for privacy information management.
- ISO 9001: extension of ISO 27001 for privacy information management.
- SOC 1 & SOC 2 (Service Organisation Control Reports): assurance reports for financial reporting (SOC 1) and data security (SOC 2).
- Cyber Essentials / Cyber Essentials Plus: UK government-backed certification for basic cybersecurity protection.
- PCI DSS (Payment Card Industry Data Security Standard): provides secure handling of cardholder data if payroll involves payment processing.
Payroll security best practices
Let’s look at 4 payroll data security best practices for 2025:
1. Perform regular payroll security audits
Think of this as a routine health check for your payroll system.
You need to regularly review (at least every quarter) who has access to payroll data to make sure that only authorised personnel can see or modify sensitive information.
Over time, your employees may change roles or leave the company. If their access isn’t revoked, they could still have the ability to view sensitive payroll data (even though they no longer need it). This creates a real security risk, as former employees might unintentionally—or intentionally—misuse that access, putting the data at risk.
2. Make sure your payroll software is always up to date
When it comes to keeping your payroll software secure, it’s not just about regularly updating the software itself, but also selecting a provider with a strong focus on security.
Here’s how you can vet payroll software providers for their security:
- Look for strong encryption: make sure the provider uses advanced encryption to protect data both in transit and at rest. This means any sensitive employee details, like National Insurance numbers or bank account information, should be encrypted to prevent unauthorised access.
- Check for compliance: make sure the provider is compliant with industry standards like SOC 2, and ISO 27001. These certifications indicate a serious commitment to data privacy and security.
- Review their security track record: research whether the provider has had any past security breaches and how they handled them. A transparent provider will have clear policies on how they manage incidents and what steps they take to prevent future breaches.
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3. Restrict payroll access
It’s essential to limit access to payroll information to only those individuals who truly need it for their job.
By carefully controlling who can view or modify this sensitive data, you reduce the chances of accidental leaks or misuse. This means that only key personnel—such as HR staff or managers who are responsible for payroll—should have access.
The fewer people who handle this information, the less risk there is for errors or malicious activity.
4. Require your people to use a password manager
Imagine having to remember dozens of complex passwords for all your payroll systems—quite the challenge, right?
That’s where a password manager (such as 1Password) comes in. It securely stores and autofills strong, unique passwords for each account, reducing the risk of weak or reused passwords that hackers can exploit.
Plus, it makes it easy to share credentials securely with authorised team members without sending them over email or a Teams message.
With built-in encryption and MFA, a password manager adds a solid layer of protection, keeping your sensitive payroll data safe from breaches.
How to react in the event of a payroll security incident
You can never be fully prepared for every possible scenario. However, having a plan in place is key.
That said, even the best plans can go awry once an incident hits. The key is to keep your plan simple and clear. Think of it like a fire drill—something easy to follow under pressure. A one-page document with specific, step-by-step instructions is ideal.
When things go wrong, the last thing you want is a complicated plan that will confuse everyone. So, it’s best to have clear actions outlined—like, for example, pull the plug on the server, or conduct a system scan to identify the issue.
Testing your team’s readiness through unannounced drills is also a good way to stay sharp. By simulating real-life scenarios, you can identify gaps and make sure your team knows exactly what to do in case of an emergency.
It’s not about having a perfect plan, but about making sure everyone’s prepared and knows how to respond when things go wrong.
A real-world scenario of how your IT team should react in the event of a payroll security incident
Imagine it’s a regular Friday afternoon, and suddenly, your payroll system flags multiple unauthorised access attempts.
Your IT team jumps into action—first, they isolate the affected system to prevent further damage, like taking a compromised server offline. Next, they conduct a rapid system scan to pinpoint the breach and determine if any sensitive payroll data has been accessed or altered.
While that’s happening, IT notifies key stakeholders, including HR and senior leadership, making sure they’re in the loop. If employee data has been compromised, a response team prepares to notify staff and provide support.
Then IT works on patching vulnerabilities and restoring the system from a secure backup.
Once the dust settles, a full review takes place to strengthen defences and prevent future incidents. The goal isn’t just to fix the issue but to come out stronger and better prepared for next time.
Are you ready to put your trust in a team that takes security seriously?
When it comes to keeping your payroll data secure, we go the extra mile.
With industry-leading cybersecurity measures, secure cloud-based storage, and numerous accreditations, Cintra is more than just payroll software—we’re your trusted partner in security and compliance. Book a demo today to speak to one of our payroll experts.
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