India is becoming one of the most proactive markets in the world when it comes to integrating artificial intelligence (AI) into payroll processes, with 34% of Indian firms intending to implement AI in the near future.

ADP report states, an HR solutions provider, India’s use of AI is growing in essential payroll tasks, with about half of businesses using it to automate procedures, simplify data entry, and compute taxes, benefits, and overtime.

The study went on to say that data validation, audits, and regulatory compliance are just a few of the other sectors being investigated for potential AI innovation.

“Payroll is located at the intersection of size and inspection in India. To improve decision-making, organizations are focusing on better controls, audit readiness, and high-quality data. Payroll teams will concentrate on data integrity, regulatory compliance, and governance excellence as AI takes over repetitive jobs, according to Rahul Goyal, Managing Director, ADP India and Southeast Asia.

The business emphasized skill shortages facing payroll teams in the Asia Pacific region (APAC), pointing out that, above the global average of 72%, 80% of businesses are looking at how to manage payroll with fewer employees.

To remedy this, reskilling and upskilling are high on the list of priorities, with about 74% of payroll managers in the Asia-Pacific region saying that staff shortages have already had an impact on their payroll activities.

According to the study, 33% of businesses saw AI as a significant factor in payroll changes over the next two to three years, and approximately 49% of respondents were experimenting with AI to enable more efficient operating models.

The firm observed that companies are mostly using AI to automate data entry, speed up report creation, and identify fraudulent transactions.

Data security laws are slowing AI adoption, according to about 79% of businesses, while 51% of survey participants want payroll teams to devote more attention to improving data security procedures via the implementation of new policies, safeguards, and continuity plans.