Top 8 payroll trends in Australia in 2025

Summary: Top 8 payroll trends in Australia in 2025

1. Payroll errors persist as SMBs juggle disconnected systems.

2. Repeat underpayments can now land directors in jail.

3. Manual entry still causes costly, avoidable payroll breaches.

4. Every disconnected system adds risk and admin hours.

5. Higher super means small payroll errors now cost more.

6. Late STP files now trigger bigger financial penalties.

7. Human error drives a third of payroll data breaches.

8. Union membership sees an uptick for the first time since 2011.

These payroll trends draw on multiple authoritative sources. We used Rippling’s Censuswide survey of 500 Australian payroll managers for first‑hand error data. Regulatory insights come from the ATO penalty‑unit updates, the Closing Loopholes Act, and Fair Work Ombudsman speeches. We took data‑breach figures from the OAIC’s latest Notifiable Data Breaches report. And union‑audit insights rely on ABS membership statistics and ACTU enterprise‑agreement coverage.

Where noted, we also cite commentary from CPA Australia, HR Legal, and other experts in the field.

Trend 1: Error rates refuse to fall

According to Rippling’s survey, 59% of payroll managers admit they’ve made at least one payroll error in the past two years. The figure jumps to 67% in mid‑sized firms with 50‑250 staff. Even though software spend is on the rise, mistake rates are holding steady. This mainly comes down to the fact that teams are still bouncing between multiple software systems.

Layered awards and ever-changing regulations magnify every slip-up. A single wrong rate or late payment can now escalate into wage‑theft claims, Fair Work probes, and public and employee trust issues that take years to undo.

Why it matters

• Wage‑theft exposure: New regulations and layered awards mean more room for mistakes, even if employee numbers stay flat. Something as simple as a missed allowance can multiply into tens of thousands of dollars.

• Board‑level risk: Directors can no longer hide behind ‘accidental.’ Repeated or reckless errors now trigger audits, massive fines, jail time, and a reputational hit that scares top talent and investors.

What to do next

• Run a quarterly payslip audit: Pull the last three months of payslips and cross‑check gross pay, tax, and super against awards and STP files, logging every fix. Tally the dollar value of corrections to prove the case for system or process upgrades.

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Trend 2: Wage theft is now a crime

For years, underpaying workers, whether intentional or not, was a civil issue. But that changed on 1 January 2025. New laws now criminalise deliberate wage theft. Under the Closing Loopholes Act, company directors and payroll leaders can now face up to 10 years’ jail and fines as high as $7.8 million if they knowingly underpay staff. And businesses are on high alert. 54% of payroll managers in Rippling’s survey say they’re actively reviewing their payroll processes in response to the legal shift.

The laws aren’t targeting genuine payroll mistakes. But with many businesses still running manual or fragmented payroll systems, the risk of appearing deliberate is dangerously high. Employers simply can’t afford to hope errors go unnoticed or quietly fix things in the background. If underpayment patterns look systemic, regulators now have the power and political backing to prosecute. Essentially, you need to fix your payroll or face the fallout.

Why it matters

• ‘Accidental’ doesn’t cut it: Regulators won’t accept sloppy processes or ignored warning signs. If you keep making the same mistake, they’ll call it deliberate.

• Wage theft covers more than base pay: The law doesn’t just apply to hourly wages. It also applies to missed super, allowances, penalty rates, and entitlements under awards or agreements.

• Staff and unions are checking the books: An increasing number of employees know their rights and won’t hesitate to report problems. Unions, the media, and class action firms are also jumping in fast.

What to do next

• Map your hotspots: Identify roles and workflows where mistakes happen most. Overtime, penalty rates, super, and casual classifications are often at the top of the list.

• Prove you tried to get it right: Audit your records. Show that you’ve fixed past errors, updated systems, trained staff, and logged every correction. That’s your legal defence.

• Ditch manual pay rules: Automate pay rates and award entitlements in one system. Prioritise software that updates automatically when the law changes, eliminating guesswork.

Trend 3: Manual data entry won’t die

Despite rising investment in payroll tools, Rippling’s survey shows that 48% of businesses still re-enter employee data manually. Essentially, onboarding forms get copy-pasted into payroll. Bank details get typed in twice. Pay rates get adjusted by hand every time someone’s role or award changes. It’s tedious, error-prone, and totally avoidable. But it’s still happening a lot.

Every time someone re-types data, they introduce the risk of underpaying, overpaying, or breaching STP and super rules. Some teams hang on to spreadsheets out of habit. Others simply haven’t worked out how to connect their systems. Either way, manual entry slows everything down. And it creates expensive mistakes that all-in-one HR and payroll software can solve in seconds.

Why it matters

• Typos aren’t little mistakes: If you type the wrong rate, BSB, super fund, or start date, you could underpay someone for quite some time without realising. You may think of this as just a small admin mistake, but it’s actually a huge compliance risk.

• Redundant admin kills productivity: Every hour spent re-entering data is an hour you could use for something that helps grow your business. Manual input doesn't scale, and it certainly doesn’t protect you.

What to do next

• Set a kill date for spreadsheets: Give your team a hard deadline to stop entering pay data manually. Set it for FY26 and build a transition plan that eliminates human input from payroll and HR workflows.

• Use connected systems: Consolidate your onboarding, payroll, and HR tools so employee data flows from one to the other automatically. If you hire someone today, they should show up on the payroll system instantly, without copy-pasting.

Trend 4: Siloed systems multiply mistakes

Rippling’s survey shows that only 10% of companies run payroll and HR in a single system. The rest rely on a collection of disconnected tools, patched together with manual workarounds. These can include HR platforms, timesheet apps, finance software, onboarding forms, and spreadsheets. 37% of businesses use five or more systems just to process a single pay run.

Every time you sync data between disconnected systems, you create another failure point. Apart from slowing you down, it opens the door to missed start dates, wrong rates, duplicate entries, and compliance breaches that go unnoticed until it’s too late. 

Why it matters

• Disconnected systems cause real damage: When tools don’t talk to each other automatically, someone will eventually end up updating one system but not the other. That’s how pay rates, start dates, and super details get missed. 

• The more tools, the more risk: More tools mean more logins, more exports, more syncs, and more confusion. And when something goes wrong (and it will), no one’s sure where or when it broke.

What to do next

• Track the real cost of tool overload: Audit how many hours your team spends syncing data across systems each month and how many mistakes they’ve had to fix. Then take that number to finance.

• Consolidate your workflows: Bring HR, onboarding, payroll, time-tracking, and compliance into a single system. This can help you reduce admin and errors, and make it easier to notice minor issues before they become huge ones.

‘The more solutions you have, the more times you need to syndicate employee data across systems and the greater chance of human error taking place.’ - Matt Loop, VP and Head of Asia, Rippling

Trend 5: Super at 12% raises the stakes

As of July 2025, the superannuation guarantee (SG) rate is 12%. It’s the highest rate in Australia’s history, and it’s not optional. But 24% of payroll managers in Rippling’s survey admit their company has made incorrect super contributions in the past. That’s roughly one in four getting it wrong on something the Australian Taxation Office (ATO) treats as black-and-white.

The higher the rate, the higher the risk. A simple 1% error now costs more. And missed contributions are unlikely to fly under the radar. The ATO can spot underpayments pretty fast via STP Phase 2. Late super payments can trigger interest, admin penalties, and potential audits.

Why it matters

• Every error now costs more: When the super rate was lower, a small miscalculation might have meant just a few dollars lost per employee. At 12%, the same mistake adds up faster, especially across lots of staff.

• The ATO has more visibility than ever: STP Phase 2 lets the ATO match payroll data to super fund payments in real time. So, if your super contribution doesn’t line up, you can expect a red flag and a follow-up.

What to do next

• Update the new rate centrally (not per employee): Hard-coding super into individual employee profiles is a surefire way to make mistakes. Use a payroll system that updates the SG rate automatically across the board.

• Build a post-pay-run super check: Once your pay run’s complete, confirm that super has calculated correctly for every employee. This is especially important for part-timers, high-income earners, and casuals who fluctuate above or below the threshold.

‘From 1 July 2025, the Superannuation Guarantee (SG) rate will rise to 12%, completing its gradual increase from 9.5% in 2021. If you employ staff, now’s the time to prepare your payroll, cashflow, and reporting to avoid underpayment risks and stay compliant.’ - R J Sanderson & Associates

Trend 6: Increased penalties for late STP files

In November 2024, the ATO penalty unit rose to $330. It can apply to up to five units per missed STP submission. In essence, just one late or failed pay event report can cost your business as much as $1,650. These penalties apply to each missed or late STP report, not just end-of-year finalisations. So, if you process multiple payrolls across entities or lodgement dates, they can add up very quickly. 

If you don’t lodge an STP submission on or before payday (or the next business day, if you’re using a concessional reporting arrangement), it counts as missed. If you upload but your software rejects or fails to transmit the file correctly (and you don’t fix it)? ATO systems will still count that as a failure to lodge. 

Once a file is late, you usually have 28 days to lodge a deferral or remission request. Otherwise, you’ll need to pay the penalty. Many businesses miss this window because they didn’t realise the report failed in the first place.

Why it matters

• Penalties can wipe out your margins: Just two missed fortnightly run reports can equate to up to $3,300 in fines. For small teams running on tight margins, this can be a catastrophic financial hit.

• The ATO won’t send a warning: You won’t get a reminder if your STP fails or goes unlodged; you’ll get a penalty notice in the mail. If you want relief, you need to be proactive about it and prove you had valid grounds for a delay.

What to do next

• Set up live STP alerts in your software: Choose a payroll system that flags failed, rejected, or missing STP uploads as they happen. Set those alerts to go straight through to the person responsible for fixing them.

• Clean up quickly if you missed the ATO finalisation cutoff: If you missed the 14 July 2025 end-of-year finalisation deadline, lodge it right now. Then log into Online Services and submit a remission request to explain the delay and avoid escalating penalties.

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Trend 7: Data‑breach exposure keeps climbing

The Office of the Australian Information Commissioner’s (OAICs) newest Notifiable Data Breaches (NDB) report logged 595 breach notifications. This is up around  15% on the previous period. It’s also the highest half‑year tally since the scheme began. 

It pushed the total number of data security breaches in 2024 beyond 1,100. And almost one‑third of these errors resulted from plain human error. The information most often exposed was financial account details (roughly 30%) and tax‑file numbers (roughly 5%). These are the exact details that sit in every payroll database. 

Why it matters

• Human mistakes still leak pay data: Mis‑addressed emails, wrong‑recipient spreadsheets, and unredacted exports caused a solid chunk of recent breaches. It’s a stark reminder to payroll teams that all it takes is a single click to spill TFNs and bank details.

• Regulators expect privacy‑by‑design: The Privacy Commissioner warns that privacy can’t be an afterthought. Boards need to prove robust cybersecurity measures that can catch human error before sensitive data leaves the building.

What to do next

• Tighten access and turn on multi-factor authorisation (MFA): Run a permissions audit every quarter to make sure that only staff who genuinely need payroll access have it. Make MFA on every payroll login compulsory so that a stolen password on its own isn’t enough to leak employee bank or TFN data.

• Practise your breach‑response procedure: Note (and practise) who investigates, who notifies the OAIC, and who informs staff if data escapes. Speed and clarity make the difference between a quick fix and a public mess.

‘Privacy by design begins with leadership’  - Carly Kind, Australian Privacy Commissioner

Trend 8: Union wage‑file audits are back on the agenda

Union power is on the rise again. The latest ABS Trade Union Membership release shows 13.1% of employees belonged to a union. This is the first uptick since 2011 and the highest share in over a decade. Australian Council of Trade Unions (ACTU) data show a record 2.67 million workers now covered by union‑negotiated enterprise agreements. And collective‑agreement wages are running well ahead of inflation.

As union activity grows, payroll teams feel the impact. Employment lawyers warn that organisers are using their legal right‑of‑entry permits to walk in and review rosters, timesheets, and pay records. And often with close to zero warning. If you can’t produce tidy, seven‑year records, unions can (and probably will) escalate straight to the Fair Work Ombudsman (FWO) or the courts.

Why it matters

• Organised labour scrutinises your books: More union delegates and bargaining campaigns mean more formal requests for payroll data. It also leads to a higher chance of wage‑theft claims if records don’t make sense.

• Poor records flip the burden of proof: If your time‑and‑wages records are missing or wrong, the Fair Work Act lets employees (or their union) assume underpayment. The onus is then on you to prove every hour worked and every dollar paid.

What to do next

• Keep every pay record for seven years: The FWO stipulates that employers must keep time‑and‑wages and pay‑slip data for a full seven‑year window. They must also make it instantly accessible to inspectors and union officials.

• Pre‑audit high‑risk awards and classifications: Schedule an internal wage‑file review before bargaining starts. Match hourly rates, allowances, and overtime against modern‑award tables so you hand over clean files if a union ever comes knocking.

‘Record keeping is the bedrock of compliance, and we expect all employers to make and keep all records the law requires.’ - Anna Booth, Fair Work Ombudsman

Streamline payroll processes with Rippling

Nearly 6 in 10 payroll professionals own up to at least one payroll processing error in the past two years. And every payroll trend in this guide, from wage‑theft laws to bigger super, higher STP fines, and union file audits, raises the cost of the next mistake. 

Rippling is your all-in-one workforce management platform that brings HR, Payroll, and IT together in one cloud platform. It’s your ticket to reducing risk without having to add headcount.

‘Payroll is holy. You do not want to mess up the payroll system. We needed a system that could do some of the basic HR stuff, but also payroll. And that's how we ended up with Rippling.’ - Hon Weng Chong, CEO & Founder, Cortical Labs

Payroll trends FAQs

How do I handle back-pay if I discover a super or award error?

Run an adjustment run (sometimes called a correction run) in your payroll software. The system will recalculate each affected pay period and compare the result with what was actually paid. It will then create a net‑difference top‑up. This ensures that employees receive only the shortfall, not their full wage again. 

Once the gap is clear, your HR and payroll team should process the top‑up, issue amended payslips, and lodge an updated STP file so the ATO can see the correction.

Without automated payroll systems, HR and payroll staff need to do all of this manually. So, re‑add hours, award rates, tax and super in a spreadsheet, and then key individual adjustment entries into the next pay run. It’s an extremely slow, error‑prone process, and exactly why automation matters.

Taking a tech‑first, data‑driven approach is widely viewed as the future of payroll. It fixes mistakes fast and leaves a clean audit trail for Fair Work.

What counts as taking ‘reasonable steps’ under the Closing Loopholes Act?

Regulators expect HR and payroll professionals to embed strong payroll management controls. These can include regular self‑audits, written policies, and alerts that flag deviations before payday.

Replacing risky manual data entry with integrated workflows, and documenting how you catch and fix payroll errors can show that your business has taken every practical precaution.

Is one platform really safer than best-of-breed tools linked by APIs?

Yes. 

For starters, a unified system locks down data security. This is because employee records stay in one encrypted database instead of ricocheting between apps and ad‑hoc APIs. Secondly, with all core payroll functions, like time capture, pay calculations, STP filing, and super payments sharing the same source of truth, you avoid the sync failures and duplicate data entry that often leads to errors and fines.

It's also worth nothing that fewer mistakes and faster fixes translate directly into higher employee satisfaction.

How long do I need to keep payroll records?

The Fair Work Act requires employers to store time‑and‑wages, payslip, and super records for seven years. Cloud‑based payroll software with automatic compliance management can help you meet that requirement automatically. Think one‑click exports of every January 2019 payslip or a casual employee’s full timesheet history.

Good payroll management practices, such as monthly mock audits and strict role‑based access, ensure that those files are retrievable instantly for union or FWO inspections.