Nearly one million health workers are now being paid through the £300m NHS Electronic Staff Record (ESR) project, claimed to be the world's largest integrated HR and payroll system.
ESR now has 476 organisations and 949,470 NHS employees 'live' on the system.
When the ESR project is complete in spring 2008, all 1.2 million NHS employees - about 7% of the working population in England and Wales - will be paid through the system, which is being delivered by healthcare IT systems provider McKesson.
ESR is part of a programme of change within the NHS - the NHS Improvement Plan - and is designed to transform the way in which the NHS delivers both HR services to its employees. Until recently, the UK's 620 trusts had been operating with 67 disparate HR and payroll systems, each of which record workforce data in a slightly different way.
Simon Willcock, ESR programme director, said: "Until recently, we had no consistent way of collecting and monitoring employee information and were relying on resource intensive fragmented systems - leading to duplication, inconsistency and error, as well as a critical lack of management information.
"ESR is helping us to change that situation and provide better services to NHS employees."
The system will also eventually provide self-service access, allowing staff to update their own records with changes to name or address details.