Recent data has highlighted a steep increase in payroll complexity
Australia has jumped from eleventh to third globally for payroll complexity, according to a recent study from Strada.
In the last year alone, there has been a 21% increase in payroll complexity in Australia.
This is creating widespread issues at organisations. A Rippling survey of 1,000 Aussie workers found that in 2024, 43% had been deliberately or accidentally underpaid.
There is a combination of factors at play that are making it more difficult for payroll teams to keep up.
Rising deductions, larger payroll teams, and diverse payment methods are compounding issues.
In conversation with HRD, Strada’s chief operating officer, Gautam Sukumar, urged leaders to “take control” of payroll through the strategic use of technology, data, and expertise.
Why has payroll become so complex in Australia?
Regulatory changes are a major factor. The ever-evolving legalities have placed pressure on payroll teams as they struggle to stay informed.
On top of this are the numerous systems at multiple organisations, including government agencies and superannuation funds.
Sukumar noted that more functions now rely on or access payroll data, including HR, finance, regulators, and sometimes courts.
This has prompted the introduction of more privacy, security, and governance requirements.
Even more complex is the payment types and frequencies that are common. Awards, overtime, bonuses, and contractors all add to the everchanging and complex payroll systems.
“What was once a straightforward process is quickly becoming a global issue and now a balancing act for organisations, with compliance, data security, and workforce diversity all demanding attention,” said Sukumar.
What are the impacts of payroll complexities?
“Payroll ripples through every layer of an organisation, creating headaches from the top down,” said Sukumar.
Because of this, it’s an issue that impacts all facets of the business. People work to be paid and any hindrance in this process is sure to evoke emotion.
There are a variety of consequences for getting it wrong, said Sukumar, including fines and reputational damage.
“For employees, these complexities show up in the detail, with direct effects on their financial wellbeing, trust, and engagement with the organisation,” he said.
“When systems are hard to decipher and deductions don’t add up, employees often miss out on benefits resulting in them paying more and feeling undervalued.
“When pay is delayed or doesn’t match their expectation, trust is damaged and this is when their well-being takes the biggest hit. This erodes confidence in their employer and ultimately impacts employee satisfaction and retention,” added Sukumar.
How can HR teams simplify payroll processes?
According to Sukumar, leaders shouldn’t be focused on eliminating payroll complexity but understand it.
“The most effective organisations today aren’t treating complexity as a background issue. Instead, they’re actively mapping it, building repeatable processes to manage it, and using those insights to improve consistency, reduce risk, and scale with confidence,” he explained.
Some effective measures for doing so are:
- Adopt cloud-based, integrated platforms
- Build cross-functional alignment
- Invest in local expertise
In an environment where payroll is only becoming more intricate, the organisations that will thrive are those that treat complexity as a strategic priority, not an afterthought.
By embracing integrated, cloud-based systems, fostering alignment between HR, finance, and other key stakeholders, and investing in specialist local expertise, leaders can transform payroll from a source of risk into a foundation of trust.
Getting payroll right is no longer just an operational necessity – it is central to safeguarding employee wellbeing, protecting organisational reputation, and enabling sustainable growth in an increasingly regulated landscape.
