VA reduces bureaucracy by centralizing payroll for all VA employees

WASHINGTON - The Department of Veterans Affairs today announced the establishment of a single payroll processing center for all 430,000+ VA employees and all VA medical centers, a common-sense move that reduces bureaucracy, saves taxpayer funds and lets VA focus more resources on serving Veterans.

VA originally targeted late 2027 for completing this project but finished it 15 months ahead of time.

"Needless duplication of bureaucracy is the opposite of putting Veterans first," said VA Secretary Doug Collins. "Consolidating payroll support for all medical centers to one payroll office is a commonsense reform that will let us focus on our real mission, which is serving Veterans, families, caregivers and survivors."

When the Trump Administration took office in 2025, the majority of VA medical centers - 114 of them across the country - were still using their own systems to handle payroll, even though VA's Financial Services Center was set up to do this work from a centralized location. This duplication cost taxpayers millions of dollars a year to maintain.

Effective June 1, 2026, all VHA facilities are processing payroll through the FSC, which was already handling payroll for all Veterans Benefits Administration and National Cemetery Administration offices. VA expects this consolidation to save taxpayers more than $24 million each year.

No VA employees were laid off or removed as part of this shift to a centralized payroll system. The new system can be run by about 600 employees. Any VA employee who is no longer needed for payroll processing has been realigned to other work.

The Trump Administration has continued to bring good governance back to VA. The move to a centralized payroll system is just one of several steps taken to make the department run more efficiently. Among other things, VA has:

• Reduced bureaucracy and removed layers of wasteful headquarters management.
• Reformed and reorganized a disjointed and under-supported police force.
• Introduced the use of manning documents to track all job titles throughout the agency, making it easier for VA to identify and fill needed positions.

Centralizing payroll is just one of several ways the Trump Administration is making VA work better for Veterans. Among other improvements, VA has:

• Opened 38 new VA healthcare facilities since Jan. 20, 2025, expanding health care access for Veterans around the country.
• Completed an all-time high of 82,083,918 direct care appointments in FY 2025, up 4.1% from FY 2024.
• Reduced the backlog of Veterans waiting for VA benefits by 74% since Jan. 20, 2025, after it increased 24% during the Biden Administration.
• Offered Veterans more than 2.8 million appointments outside of normal operating hours, giving Veterans more timely and convenient options for care.
• Permanently housed 51,936 homeless Veterans across the country in FY 2025, the highest total in seven years.