The 2025 Payroll Industry Report from the Australian Payroll Association offers a clear view into how payroll systems are performing across the country. Based on input from over 1,900 employers, it highlights practical opportunities to improve system integration, automation, and decision support.
For payroll leaders managing compliance, reporting, and operational accuracy, the findings are both realistic and actionable.
Integration and Process Still Pose Challenges
Two of the most commonly reported issues were:
- Poor integration between systems – 23.6%
- Payroll technology and process issues – 22.3%
These figures highlight a familiar theme: while most systems handle core processing well, integration gaps with HR and finance systems still drive manual work and limit visibility, especially where EBAs or award complexity is involved.
Satisfaction Tied to Organisation Size
Payroll technology satisfaction varied significantly by business size:
|
Organisation Size |
General Sentiment |
|
Small (<50 employees) |
Generally satisfied – simpler setups |
|
Mid-size (501–1,000 employees) |
Lowest satisfaction – complexity exceeds system capability |
|
Large (2,000+ employees) |
Mixed – some using mature platforms, others managing legacy tools |
The mid-market, in particular, appears underserved often too large for entry-level solutions and not large enough for custom enterprise tools.
AI and Automation Are Supporting Roles
The report reinforces that AI is not replacing payroll roles, but helping payroll professionals:
- Automate award and EBA interpretation
- Improve compliance monitoring
- Reduce manual calculation errors
Used appropriately, automation allows teams to shift time and attention toward reporting, analysis, and risk oversight.
The Payroll Software Market Is Crowded—and Fragmented
Australia’s payroll software landscape remains deeply fragmented. No single provider dominates, but key players include:
- Chris21/iCHRIS
- ADP
- Micropay
- KeyPay/Employment Hero (gaining ground with cloud-native tech)
The most telling stat? 15.9% of respondents chose “Other”, reflecting a long tail of niche vendors and bespoke solutions. Choosing the right system is less about popularity and more about alignment with business needs, complexity, and resourcing.
Where Payroll Leaders Can Focus in 2025
Based on the report’s findings, here are four areas worth prioritising:
- Improve integration – Align payroll with HR, finance, and compliance systems.
- Use automation where it makes sense – Focus on compliance, validation, and admin-heavy tasks.
- Enhance analytics and reporting – Look for tools with flexible, reliable insights.
- Build team capability – Invest in training to maximise the value of your tech.
Looking for Payroll Software That Fits Your Work Structure?
Whether you’re assessing a new platform or reviewing your current setup, the 2025 Payroll Software Directory is a practical resource. It provides a clear overview of the current market, helping payroll leaders compare features, integration capabilities, and support models—so you can choose technology that fits your specific work structure and compliance environment.
A Balanced Outlook
The 2025 report doesn’t suggest a major crisis, it simply points out where systems are falling short and where improvements are most needed. Most payroll teams are running reliably, but many are working harder than they should due to limited tools and fragmented processes.
With the right technology and a continued focus on capability and integration, payroll can be more than a function it can be a strength.
