Mark, We haven't changed anything about the way payslip emailing works for a long time.
In the last couple of months one other user claimed that upgrading 12Pay had "broken" the ability to email payslips. When they investigated further it turned out that the software was still sending them perfectly correctly, they were jamming in the smtp server's own forwarding queue for a reason that was nothing to do with 12Pay, and the fact that they'd upgraded 12Pay recently was a complete red-herring.
We've successfully helped several new users get up-and-running with emailed payslips in the last fortnight. And apart from you (and the case in the previous paragraph) we've had no reports of problems. So we have no evidence that anything is wrong at our end.
What failure message are you getting back to 12Pay from your smtp server?