Outsourced payroll in Australia: bureau, software or your own payroll officer

Outsourced payroll in Australia comes in three forms: a payroll bureau that runs your pays for a fee, STP-enabled software that you or your bookkeeper run in-house, or a dedicated payroll officer you hire, either locally or offshore. A local payroll clerk earns a median of $1,606 a week according to Jobs and Skills Australia. Whichever model you choose, the rules got tighter on 1 July 2026, when Payday Super started and super became due within 7 business days of every payday.

This guide explains what payroll outsourcing covers, what payroll now has to do under Australian rules, what each option costs and suits, and who carries the risk when something goes wrong.

What is payroll outsourcing?

Payroll outsourcing means handing some or all of your payroll processes to someone outside your internal teams. That can be a payroll outsourcing company (often called a payroll bureau), an accountant or BAS agent who offers payroll services, or a dedicated payroll officer you hire to run payroll for you.

Whichever model you use, the work is the same. Outsourced payroll in Australia usually covers:

• Calculating employee wages from timesheets and employee hours, applying modern awards or enterprise agreements, penalty rates, allowances and overtime
• Working out net pay after PAYG withholding, salary sacrifice and other deductions
• Paying staff and making third party payments, such as superannuation contributions to each employee’s fund
• Payslips, which the Fair Work Ombudsman says must be given within 1 working day of pay day
• STP reporting to the ATO each time you pay
• Leave balances, employee queries, and payroll tax returns where you are over the threshold

A good provider handles the full range of Australian employment models, from full-time and part-time staff to casuals on rosters. Some bundle payroll with HR services such as onboarding and leave administration, while others take on the payroll functions only. In every case, the payroll professionals doing the work handle calculating wages and reporting, and you keep the approvals.

How payroll outsourcing works: the payroll processes step by step

A typical pay cycle with an external provider looks like this:

1. You send the inputs. Timesheets, attendance tracking data, new starters, terminations and pay changes go to the provider before the cut-off for the pay period.
2. The provider processes payroll. They calculate gross pay, tax, super and net pay in the payroll platform, and flag anything unusual.
3. You review and approve. An authorised person in your business checks the payroll report and approves it.
4. Payments are released. Wages go to staff, and super goes to each fund within the Payday Super deadline.
5. Reporting is lodged. The pay event is reported through Single Touch Payroll, and payslips go out.

Many providers run this on cloud based payroll systems, and some offer employee self service portals where staff see payslips and update their details. Ask what yours includes.

What does payroll have to do in Australia in 2026?

Two ATO systems shape every pay run.

Single Touch Payroll (STP). STP sends tax and super information from your STP-enabled payroll or accounting software to the ATO each time you run payroll. The report covers what you paid, the type of income, the components (gross pay, paid leave, allowances, overtime), PAYG withholding and super entitlements. Employees then see their year-to-date figures in myGov, and you do not issue payment summaries for amounts reported and finalised through STP.

Payday Super. From 1 July 2026, the ATO requires you to:

• pay super guarantee for each payday, instead of quarterly
• calculate it at 12% of “qualifying earnings”, a new term that brings together ordinary time earnings, commissions, salary sacrifice contributions and similar amounts
• make sure the contribution is received by the employee’s fund within 7 business days after payday, with enough information to allocate it (there are some exceptions, such as for new employees)
• report both qualifying earnings and super liability through STP

The ATO also notes that the Small Business Superannuation Clearing House has closed. If you used it, your payroll process needs a new way to pay super.

When a payment is late, the super guarantee charge now applies after 7 business days rather than 28 days after the quarter. The ATO assesses it, and it includes interest that compounds daily at the general interest charge rate plus an administrative uplift amount. Under the old system, many businesses had weeks to catch a mistake. Now it is days.

What are the three ways of outsourcing payroll for Australian businesses?

Option	Who does the work	Best for	Watch out for
Payroll bureau	An external provider runs your pay runs, STP and super	Businesses that want payroll entirely off their desk	Per-employee or per-pay-run fees, and less control over timing
Payroll software, run in-house	You, a bookkeeper or an office manager, in STP-enabled software	Small teams with simple pay	Payday Super deadlines land on someone who has other jobs
Your own payroll officer	A dedicated person you hire, locally or offshore	Larger or more complex payrolls, multiple awards or sites	You manage the person, and review stays with you

When do payroll outsourcing services make sense?

A payroll bureau takes the whole process off your desk. The main benefit is a reduced administrative burden: managing payroll stops being a job for the owner or finance team, and internal teams get time back for strategic initiatives and core business work. You send timesheets and changes, and they calculate pays, lodge STP, pay super and handle queries. Bureaus are usually priced per employee or per pay run, so ask for a quote based on your headcount and pay frequency. A payroll company suits Australian businesses that want an outsourced payroll solution without hiring anyone, including professional services firms with salaried staff and simple pay.

Two things to check before you sign:

1. TPB registration. The Tax Practitioners Board lists payroll services that interpret and apply a taxation law or BAS provision, including reporting through STP-enabled software, as BAS services. Providing BAS services for a fee or reward while unregistered attracts significant civil penalties. Ask the bureau for its registration and check it on the TPB register.
2. Payday Super turnaround. With 7 business days from payday to the fund receiving the money, ask exactly when the bureau pays super after each run and what happens if a fund rejects a payment.

When is in-house payroll software the right payroll solution?

For small businesses with a handful of staff on simple salaries, processing payroll in house with STP-enabled payroll software may be all you need. The software calculates PAYG and super, files STP and can pay super from inside the system.

The risk is people, not software. Payroll is often one of many jobs for a busy owner or office manager. Under quarterly super, a late pay run could be fixed before the quarter’s deadline. Under Payday Super, a missed week can mean a super guarantee charge. If you run payroll in-house, put the super payment date in the same checklist as each payroll.

The TPB also distinguishes plain data transmission through STP, which does not require interpreting tax law and is not a BAS service, from payroll services that do. If an outside bookkeeper sets up your payroll categories or works out withholding, that is BAS work.

What are the common payroll challenges?

Most payroll problems come from a few places:

• Award interpretation. Applying modern awards and enterprise agreements correctly, including penalty rates, overtime and allowances, is where many underpayments start.
• Manual errors. Re-keying timesheets or changes by hand creates mistakes that flow through to pay, tax and super.
• Tight deadlines. Payslips within 1 working day of pay day, and super in the fund within 7 business days, leave little room for a pay run to slip.
• Key-person risk. If one person knows how payroll works and they leave or go on holiday, payroll stalls.

These payroll challenges are why many Australian companies move payroll to a specialist provider or a dedicated person once headcount grows. Keeping payroll operations in house can still work, but only with a backup person and a written process.

How do you ensure compliance when you outsource payroll?

Payroll compliance in Australia sits across several regulators, and outsourcing does not move the legal obligations.

Obligation	Rule	Source
Super	Paid on each payday at 12% of qualifying earnings, received by the fund within 7 business days	ATO
STP reporting	Each pay event reported through STP-enabled software	ATO
Payslips	Given within 1 working day of pay day	Fair Work Ombudsman
Records	Time and wages records kept for 7 years	Fair Work Ombudsman
Payroll tax	Paid to the state or territory where workers are, once wages pass its threshold	business.gov.au
BAS services	Payroll work that applies tax law needs a TPB-registered provider	Tax Practitioners Board

The compliance risk is real. The Fair Work Ombudsman notes that from 1 January 2025, intentional underpayment of wages or entitlements can be a criminal offence under the Fair Work Act 2009. For an individual, a court can impose up to 10 years in prison, a fine, or both. For a company, the maximum fine is the higher of 3 times the underpayment or $9.1 million. Honest mistakes are not included, but good tax compliance and accurate records are still your best protection. Ask any provider which compliance tools and checks they use to make sure staff are paid accurately, and weigh those compliance costs alongside the fee.

When should you hire your own payroll officer?

Once payroll involves multiple awards, shift penalties, allowances, salary packaging or several sites, it becomes a role in its own right. A dedicated payroll officer can process timesheets, apply award rules, run pay runs, reconcile super and answer staff questions, with a manager reviewing and approving each run.

Locally, Jobs and Skills Australia reports median weekly earnings of $1,606 for full-time payroll clerks, about $83,512 a year before 12% super (about $10,021) and other on-costs. JSA notes the figure is a guide only.

Offshore, a payroll officer based in the Philippines costs a fraction of that in salary. Payroll officer is not one of the roles in our published salary table, so Tarino can benchmark it for you on a call. The step-by-step for hiring one, including screening for Australian payroll experience, is in how to hire an offshore payroll officer in Australia.

If your payroll volume is smaller, a bookkeeper who handles payroll inputs alongside reconciliations may cover it. Our bookkeeper role page shows what that role usually includes.

What does outsourced payroll cost?

There is no official benchmark for outsourced payroll cost in Australia. Bureaus usually quote per employee or per pay run, and some add a base monthly fee. When you compare quotes, ask about additional costs such as:

• setup and onboarding of your employees and awards
• off-cycle pay runs and terminations
• end-of-financial-year finalisation
• payroll tax returns and workers compensation reporting
• award interpretation or rostering advice

To calculate the payroll cost you have now, add up the hours spent on each pay run, multiply them by the hourly cost of whoever does the work, and add software licences. For example, a local payroll clerk on the Jobs and Skills Australia median of $1,606 a week costs about $42 an hour in wages on a 38-hour week, before super and on-costs. That is our calculation from the published figure. Compare that total with the bureau’s quote for the same work, and with the cost of a dedicated offshore hire if the volume justifies a full-time role.

A per-employee quote also makes payroll costs more predictable than staff time, which moves with turnover, leave and overtime. Payroll outsourcing can reduce costs and free internal resources for core business activities, but only if the provider gets it right. A cheap quote that leads to late super or underpayments costs more in the end.

Outsourced payroll Australia checklist: how to choose a payroll provider

Before you sign with any payroll service providers or payroll outsourcing company, check:

1. Registration. TPB registration for any payroll work that interprets tax law.
2. Award experience. Ask which modern awards and enterprise agreements they already run, and how they handle multiple awards.
3. Payday Super process. When they pay super after each run, and how they track fund receipts.
4. Data security and privacy. Who can see your payroll data, how access is restricted, and how quickly it is removed when someone leaves. Payroll records are personal information, so ask how the provider meets the 13 Australian Privacy Principles under the Privacy Act 1988, which apply to organisations the Act covers.
5. Integration. Whether their payroll platform connects to your accounting software so you avoid double handling.
6. Exit terms. How you get your payroll data back if you change providers, given the 7-year record-keeping rule.

Who is responsible if outsourced payroll goes wrong?

You are. Outsourcing moves the work, not the obligation. The ATO’s super guidance says that if you do not pay enough super guarantee on time and to the right fund, you will be liable to pay the super guarantee charge. The same applies to PAYG withholding and STP reporting: they are employer obligations.

How to keep control of payroll management

That shapes how you set up any of the three options:

• Keep approval and payment authority with you. Whoever prepares the pay run, an authorised person in your business approves it and releases the payments.
• Check the super receipt, not just the payment. Under Payday Super the test is when the fund receives the contribution, so reconcile against fund confirmations.
• Write the timeline down. Pay day, STP lodgement, super payment and the 7-business-day deadline, with a named owner for each step.
• Control access. Give payroll staff named logins with the minimum permissions they need, and remove access on the day someone leaves.

This is general information, not tax or legal advice. Confirm your payroll setup with a registered BAS agent, tax agent or qualified adviser.

What does an offshore payroll hire cost through Tarino?

Tarino recruits; you hire and pay your payroll officer directly. Our fee is $5,000 excl. GST per placement: $250 upfront, credited back when you hire, plus $4,750 on hire. There is no monthly fee and no margin on salary. See pricing.

By comparison, one published agency rate is A$1,099 per person per month plus A$1,200 per hire, on top of salary. That is about $14,400 in fees in the first year and about $13,200 a year after that.

We build a pool of 1,000+ candidates per role and screen them through CV checks, a video screen, a practical task and a structured interview. For payroll, the practical task can test award interpretation and a sample pay run. You get a shortlist of 3 to 4 in about two weeks, and each placement includes 6-month replacement cover for the same role.

If you would rather not hold the employment contract or pay someone overseas yourself, Tarino EOR does that through Deel for $387 per employee per month. Our guide to paying overseas staff from Australia explains both routes.

Which option fits your business?

• A small team on simple pay: STP-enabled software, run by you or your bookkeeper, with a firm Payday Super checklist.
• You want payroll off your desk entirely: a registered payroll bureau, with clear super turnaround times in the agreement.
• Complex or growing payroll: a dedicated payroll officer, with approval kept onshore. Offshore is the lower-cost way to make it a full-time role and supports business growth without adding local labour costs.

Run your own numbers in the cost calculator, or book a 30-minute call and we will benchmark an offshore payroll officer for you.