As Dan Dare said.
In my neck of the woods, the radar system corrects the data sent by the altitude encoder for local QNH, as per the QNH areas promulgated.
Above transition level, the encoder should be correct. In my experience, it's usually accurate to about a hundred feet.
The only likely source of inaccuracy would be if there was a significant variation of QNH from one side of a promulgated QNH area to the other side (as could happen with severe weather, or a frontal passage) and the pilot had set the altimeter to read airfield elevation prior to departure, and had not received the (significantly different) area QNH.