Citation Group's chief operating officer says onboarding gaps and disconnected systems are driving the payroll errors most businesses don't see coming
Nearly nine in ten Australian businesses believe their payroll is accurate, yet almost half have uncovered an error at some point – a gap that Citation Group chief operating officer Renee Roussety says reflects a false sense of security rather than genuine payroll compliance.
The finding comes from The Workforce Pulse 2026, a national survey of 510 Australian business owners and leaders conducted by Citation Group. It found 87 per cent of businesses are confident their payroll accurately reflects current award rates, classifications and entitlements, while 42 per cent have found a payroll error at some point and 43 per cent worry about getting pay or entitlements wrong.
"Every business feels confident in their payroll, but if you're not running proper checks, that confidence means nothing," Roussety said.
Confidence is not the same as accuracy
According to the report, confidence is often a reflection of how carefully payroll was set up initially, rather than how consistently it has been reviewed since. Businesses using outsourced payroll providers reported lower confidence (83 per cent) than those managing payroll internally (93 per cent), and pressure points tend to emerge as businesses grow past 10 to 20 employees, when payroll complexity increases faster than processes can keep pace.
Roussety said the root cause is rarely deliberate. "People don't know what they don't know a lot of the time," she said, noting that most business owners' expertise lies in running their business, not in payroll administration. "There is some level of shock when you go and review their payroll and they go, 'I just didn't know that.'"
Much of that risk, she said, starts with operational processes that have nothing to do with payroll on the surface. "Operational processes that aren't properly set up can have huge impacts on payroll outcomes," she said, pointing to something as simple as failing to record break times accurately. "If you don't record what time that break has taken, then you can't actually pay payroll correctly, and you could end up underpaying. And that's a huge risk."
Onboarding, not payday, is where errors begin
Roussety said businesses should look further back than their payroll processing system if they want to close the gap. "Look at your end-to-end process, look at how you onboard an employee," she said. "Are you gathering all the information you need for compliant rostering at the point of onboarding? Are you gathering all the information you need for compliant payroll at the point of onboarding?"
Details captured – or missed – at that first stage carry through the entire employment relationship, she said. "Even the age of employee can affect rostering, visa status … all these things actually can affect what award you put them on, whether it's an IFA, whether you – how you assign their level under the award. And then that ultimately affects payroll."
Her advice: "Take a look first at your onboarding and employee management process before you even look at your payroll processing side of things," a point echoed in HRD Australia's earlier coverage of how HR sits at the centre of payroll compliance ownership.
Outsourcing does not remove accountability
The report also flags disconnected systems as a recurring cause of underpayment, with 58 per cent of businesses running fragmented payroll, HR and safety platforms that don't communicate with each other. "You can have 17 different compliance systems, but if the data going into them gets interrupted or is wrong at any stage, you're going to have problems," Roussety said – a dynamic explored further in HRD Australia's recent look at continuous compliance obligations reshaping payroll and HR in 2026.
Outsourcing, Roussety said, is not a shortcut around this problem. "The real risk with outsourcing is payroll is seen as an external administrative function and doesn't have influence within the organisation," she said. "Outsourcing for me can either go really, really well because they know what they're doing and they have the expertise, but it can be very, very dangerous, particularly in Australia."
She said the connection between operational data and payroll processing needs constant vigilance regardless of who runs it, a theme also raised in HRD Australia's reporting on payroll deadlines colliding with cash-flow and compliance pressures.
With wage theft now a criminal offence under the Fair Work Act and Payday Super reshaping how superannuation is reported, Roussety said payroll needs a stronger seat at the table. "Payroll should have a clear voice, and the person that is processing payroll should understand why they're processing – and they should be listened to," she said. "It should be collaborative, especially in bigger businesses, but it should have influence."
