Using dedicated payroll software can be a game-changer in avoiding wage theft errors. Manual payroll processes are slow and error-prone especially in businesses with complex shifts. Can you imagine where a hospitality manager using spreadsheets spends up to 30 hours per month fixing time-sheet errors? In this day and age, we can’t either! With automated systems now dominating, it can drastically cut payroll processing time by 90%, saving up to 25+ hours monthly.
What is Manual Payroll?
Traditional payroll typically involves manual processes, such as:
- Paper timesheets or Excel spreadsheets
- Manual award interpretation
- Hand-calculating overtime, penalty rates, and allowances
- Preparing pay slips and tax reports manually
While this approach may work for very small teams, it becomes inefficient and risky as a business grows. Errors are more likely, and compliance with Fair Work, NES, and ATO can quickly become overwhelming.
What Is Payroll Software?
Payroll software automates most of the processes mentioned above. A cloud-based system integrates HR, rostering, time tracking, and payroll in one platform. Instead of manually checking every award rule, the system calculates entitlements, tax, and super automatically.
Key benefits include:
- Automation: Eliminates repetitive manual data entry.
- Compliance: Built-in award interpretation ensures employees are paid correctly.
- Accuracy: Reduces human error.
- Scalability: Handles thousands of employees without adding more admin staff.
- Integration: Syncs with HR, rostering, and accounting systems.
Manual Payroll vs Payroll Software
| Feature | Traditional Payroll | Payroll Software |
|
Accuracy |
Relies on manual input, prone to errors which may lead to wage theft | Automated calculations reduce mistakes and high accuracy |
|
Compliance |
High risk of underpayments, difficult to track modern awards |
Built-in rules for Fair Work and award compliance |
|
Efficiency |
Time-consuming, especially for large teams |
Fast, automated, and scalable |
| Record Keeping |
Paper files or spreadsheets, easy to misplace |
Digital storage of 5 years or more |
| Cost | Low upfront, but costly in errors and admin hours |
Subscription cost, but long-term savings in efficiency |
| Scalability | Struggles as workforce grows |
Easily handles mid-to-large workforce |
How to Choose a Payroll Software?
With the growing number of payroll softwares, we understand how it must be a bit of a drama to choose the best one. For the best return on investment, we suggest looking those that has:
- Award Compliance: Pre‑loaded Building & Construction Award rules with auto‑updates.
- Time & Attendance Integration: Mobile or web clock‑in that feeds directly into payroll.
- Pay Schedules & Worker Types: Support full‑time, part‑time, casuals, and contractors.
- ATO & STP2 Compliance: Quick Single Touch Payroll reporting.
- User‑Friendly Interface & Support: Intuitive dashboards and responsive customer service.
- Scalability & Integrations: Sync with accounting (e.g., Xero) and project management tools.
Having these features will definitely keep you in check within a single source of truth.
What is the Cost of a Payroll Software?
While any software has a subscription, consider the cost of errors. In 2023–24 the Fair Work Ombudsman collected over $21 million in penalties from a few key cases. A single intentional breach can trigger fines up to $8 million. The up-front cost of a payroll system is tiny compared to these risks. Moreover, Workstem’s pricing is usage-based (you only pay for active employees), often saving money compared to legacy systems with fixed fees.
Should All Businesses Switch to a Payroll Software?
Any businesses with more than a handful of staff should strongly consider it. With wage theft now a crime, automated compliance offers peace of mind. Even small businesses can use payroll software and still get code protection if an honest mistake happens. In short, payroll software streamlines processes and proactively prevents underpayment issues.
How Workstem Simplifies Payroll Compliance
Simplify award interpretation and payroll processing with Workstem, the all-in-one workforce management & payroll software designed for every industry. Our system supports 122+ modern awards & 34 EAs, and keeps you up-to-date with changes in wage rates, penalty rates, and overtime rules.Workstem offers:
- Automated award interpretation
- Real-time wage calculations and timesheet syncing
- Employee self-service app for rosters and payslips
- Seamless integrations with Xero, NetSuite, and more
Choose from our Standard or Advanced plan to suit your business needs, and stay Fair Work compliant with confidence.
Book a free demo with our payroll experts and experience how Workstem can streamline your payroll and workforce operations.
FAQs About Payroll Compliance
Q1: How does payroll software reduce wage theft risk?
A1: It automates award compliance and ensures correct pay calculations.
Q2: What are the risks of manual payroll?
A2: High error rates, misclassifications, and non-compliance with award rules.
Q3: Can payroll software save costs in the long run?
A3: Yes, by avoiding underpayment penalties and reducing admin time.
Q4: Why is Workstem better than manual payroll?
A4: It integrates rostering, attendance, and payroll in one system with award compliance built-in.
Q5: Is payroll software necessary for mid to large businesses?
A5: Yes, as manual compliance is unsustainable at scale and exposes businesses to high risks.
