Background The percentage of cancer patients diagnosed at an early stage is reported publicly for geographically-defined populations corresponding to healthcare commissioning organisations in England, and linked to pay-for-performance targets. Given that stage is incompletely recorded, we investigated the extent to which this indicator reflects underlying organisational differences rather than differences in stage completeness and chance variation. Methods We used population-based data on patients diagnosed with one of ten cancer sites in 2013 (bladder, breast, colorectal, endometrial, lung, ovarian, prostate, renal, NHL, and melanoma). We assessed the degree of bias in CCG (Clinical Commissioning Group) indicators introduced by missing-is-late and complete-case specifications compared with an imputed ‘gold standard’. We estimated the Spearman-Brown (organisation-level) reliability of the complete-case specification. We assessed probable misclassification rates against current pay-for-performance targets. Results Under the missing-is-late approach, bias in estimated CCG percentage of tumours diagnosed at an early stage ranged from −2 to −30 percentage points, while bias under the complete-case approach ranged from −2 to +7 percentage points. Using an annual reporting period, indicators based on the least biased complete-case approach would have poor reliability, misclassifying 27/209 (13%) CCGs against a pay-for-performance target in current use; only half (53%) of CCGs apparently exceeding the target would be correctly classified in terms of their underlying performance. Conclusions Current public reporting schemes for cancer stage at diagnosis in England should use a complete-case specification (i.e. the number of staged cases forming the denominator) and be based on three-year reporting periods. Early stage indicators for the studied geographies should not be used in pay-for-performance schemes.