The European Payments Council (EPC) has introduced changes to the SEPA Rulebook to align SEPA payment files with the ISO 20022 financial messaging standard. These changes include updates to payment file formats and the move from unstructured to structured address data. This latest version of the SEPA format is commonly referred to as Version 9.
While the original November 2026 deadline for readiness has been deferred, the direction of travel remains unchanged. Organisations are still being encouraged to continue their migration plans and prepare for the transition towards structured address formats.
As we’ll explore in this guide, for HR and payroll teams this is more than a technical banking update. The changes have implications for employee data, payroll processes, testing activities and coordination with banking providers.
For HR and payroll professionals, SEPA simplifies the process of paying employees across Europe by providing a consistent framework for euro payments. It is particularly important for organisations with international or mobile workforces, helping employees receive their salary regardless of where their eligible SEPA bank account is held.
As part of its own programme, Zellis has undertaken testing with a number of banking providers. Those activities have reinforced an important point: readiness is not progressing at the same pace across the market. Some banks have confirmed their ability to accept updated payment files, while others continue to work towards implementation. As a result, testing approaches, implementation timelines and acceptance criteria can vary between providers. The good news is that the Zellis platform supports compliance readiness.
Understanding the wider purpose of SEPA, the rationale behind the latest changes and the practical implications for payroll teams can help organisations prepare more effectively for what comes next.
What is SEPA?
SEPA, or the Single Euro Payments Area, is a European payments initiative designed to make euro payments across participating countries as straightforward as domestic payments. It enables individuals, businesses and public sector organisations to make and receive euro payments using common standards, processes and payment schemes.
Today, the SEPA payment schemes cover 41 countries and territories, including all EU member states, the UK, Switzerland, Norway, Iceland and several other European countries.
The aim is simple: a euro payment from Dublin to Madrid should be no more complicated than a euro payment from Dublin to Cork.
Why was SEPA created?
The introduction of the euro established a common currency, but different countries continued to operate different payment arrangements, standards and banking processes.
SEPA was introduced to address that fragmentation and create a more harmonised market for electronic euro payments. Through standardised payment schemes, common technical standards and shared rules, it allows organisations and individuals to move money across borders more efficiently.
For employers, this creates greater consistency when paying employees, suppliers and contractors across multiple countries.
Why does SEPA matter to payroll?
Payroll professionals may not think about SEPA payment every day, but it sits behind countless salary payments made across the Republic of Ireland and the rest of Europe.
SEPA has been designed to remove much of the complexity that sits behind the processing of payroll payments by providing a common framework for euro credit transfers and direct debits.
This is particularly valuable for organisations that:
- Employ people across multiple countries
- Run centralised payroll operations
- Support remote or internationally mobile workers
- Manage multiple banking relationships
- Process high volumes of salary payments
For many organisations in Ireland, SEPA is simply the mechanism that ensures employees are paid accurately and on time, regardless of where their bank account is held within the SEPA area.
One of the practical benefits of SEPA, and the rationale behind the SEPA payment file changes, is that employees can receive euro salary payments into eligible accounts held elsewhere within the SEPA area, reducing the need to open a new local bank account simply to be paid. For organisations recruiting internationally, that can remove one of the practical complications that often accompanies relocation and cross-border working arrangements.
As talent becomes increasingly mobile, the ability to make payments through a consistent framework becomes more important for employers and employees alike.
What is changing?
One of the most significant changes linked to the updates is the move from unstructured address data towards structured address formats within SEPA payment files.
Historically, address information could often be recorded in a single free-text field. Under the structured approach, address information may instead be separated into individual elements such as:
- Street name
- Building number
- Town or city
- Postal code
- Country
The objective is to improve consistency and data quality across the payments ecosystem and support the use of more standardised payment information.
What happened to the November 2026 deadline?
The originally planned November 2026 end date for unstructured addresses has been postponed while the EPC reviews market readiness and confirms a revised timetable.
As a result, organisations can continue to use unstructured addresses beyond November 2026 for the time being.
However, this should not be viewed as a cancellation of the change. The industry continues to move towards structured address formats, and organisations are being encouraged to maintain their migration plans and preparation activities.
Some banks plan to proceed with a migration to Version 9 of SEPA anyway, even though the EPC are pushing out the target date for mandatory compliance. The situation is therefore very fluid at present and your own target date for compliance will largely depend on the approach taken by your bank.
For example, AIB are currently informing clients that they plan to transfer to the new format from November 15th this year, so clients are advised to contact their own bank to establish their bank’s plans for cutting over and any deadline date that the bank may be working towards. Clients should then contact Zellis to discuss their own plans so that Zellis can assist with the transition to the new format.
Why SEPA readiness is about more than software
When payment standards change, there is a tendency to view them as a payroll software issue. In reality, readiness depends on several different parties.
Payroll systems, HR systems, payroll providers, banking providers and employers all form part of the payment journey. A payroll platform may support the latest requirements, but organisations still need to understand how employee data is collected, how payment files are generated and what requirements individual banks may impose.
This is particularly relevant in Ireland, where payment processing does not operate through a single, uniform approach. Different banks can have different validation rules, testing approaches and mandatory data requirements. As a result, as stated above, readiness can vary between banking providers, even where organisations are using the same payroll software.
Why testing matters
The history of payroll is full of examples where a process appears compliant on paper but behaves differently in practice. Payment standards are no exception.
When file formats, validation rules or mandatory data requirements change, testing becomes one of the most effective ways to gain confidence that payroll payments will continue to be processed successfully.
A payment file that passes one set of checks may still encounter issues elsewhere in the payment chain. That is why many organisations are treating the current SEPA changes as more than a technical compliance exercise and are working with banking providers to understand testing requirements and readiness activities.
For payroll leaders, the stakes are obvious. Employees rarely notice when payment systems work as expected. They notice very quickly when salaries fail to arrive on time.
Why should HR and payroll professionals pay attention?
At first glance, the move to structured address data can look like a technical banking requirement. In reality, it highlights a broader trend: payment processes are becoming increasingly dependent on the quality of workforce data.
As banks and payment providers adopt more structured payment standards, organisations may need to review how employee information is captured and maintained to ensure it supports changing requirements.
For many employers, address data originates within an HR system before being transferred into payroll and then included within payment processes. As data requirements evolve, HR and payroll teams may need to work more closely together to ensure information is complete, accurate and transferred correctly between systems.
This becomes especially important in organisations where employee data passes through multiple platforms before reaching a banking provider. The more systems involved, the more important it becomes to understand data ownership, data quality and how key information is maintained throughout the process.
Payroll leaders are accustomed to managing compliance and regulatory change. Payment changes, however, affect the final stage of the payroll process. A payroll calculation can often be corrected. A missed salary payment creates a problem that employees experience immediately and one that is considerably harder to put right.
The postponement of the deadline provides additional time to prepare, but it does not remove the need to understand where employee data originates, how it moves between systems and whether existing records contain the information that may be required in future.
Are faster payments becoming part of the picture?
Yes, they are. Alongside traditional payment methods, the industry has introduced the SEPA Instant Credit Transfer scheme, often referred to as SCT Inst.
This allows euro payments to be transferred within seconds rather than through traditional settlement cycles. While payroll payments generally continue to run according to established pay schedules, the growth of instant payment services reflects a wider trend towards faster and more responsive payment infrastructure across Europe.
What is ISO 20022?
ISO 20022 is a global standard for financial messaging that provides a common way for organisations and financial institutions to exchange payment information.
Its purpose is to make payment data more consistent and easier to process across different systems, organisations and countries. Structured data supports more consistent processing and validation of payment information by using common definitions and formats.
The latest SEPA Rulebook updates form part of the wider move towards ISO 20022 and more structured payment data.
Looking ahead
SEPA has transformed the way euro payments are made across Europe, creating a far more integrated framework for businesses, public sector organisations and individuals. What began as a project to harmonise payments continues to evolve as the industry adopts new standards and technologies.
The latest changes linked to ISO 20022 are part of that evolution. While the immediate focus may be on payment files and address formats, the wider message is about data quality, consistency and readiness.
For HR and payroll professionals, preparation should focus on understanding existing data, engaging with banking providers, reviewing end-to-end payroll processes and ensuring that employee information can support future requirements.
The deadline may have moved, but the destination remains the same.
How can Zellis help with SEPA readiness?
Zellis has already implemented the changes required to support the latest EPC SEPA Rulebook updates and ISO 20022 requirements.
As part of our readiness programme, we’ve also undertaken testing with a number of banking providers, including Irish banks. That testing has shown that readiness, implementation timelines and acceptance criteria can vary between providers.
If you’re reviewing your readiness for the upcoming SEPA changes, Zellis customers can speak to their Customer Success Manager. They can help you understand the changes, discuss bank-specific considerations and support your planning and testing activities.
Explore Zellis Managed Services to find out how Zellis can help with your SEPA readiness.
