Ross Heron | CEO, Australian Payroll Association
Payroll continues to feature in the headlines, and while the organisations may change, the underlying issues remain consistent.
Delayed payments, large scale underpayments, and remediation programs are still occurring across both public and private sector organisations. These are not isolated incidents. They are a reflection of the broader operating environment payroll functions are working within.
Recent Fair Work activity continues to highlight this. In the aged care sector, enforcement action has identified more than $11 million in underpayments affecting thousands of employees, linked to award interpretation and payroll system configuration. In higher education, a university was penalised in the Federal Court for systemic payroll failures, including underpayments and record-keeping breaches. Fair Work has also continued to commence legal proceedings across sectors such as hospitality and retail in relation to alleged underpayments and compliance breaches.
These examples reinforce that payroll challenges are not confined to one industry but are widespread across the Australian economy.
“Worker entitlements can quickly create a massive bill if not managed with appropriate checks and balances.”
— Anna Booth, Fair Work Ombudsman
The reality is that payroll in Australia is complex. Multiple awards, enterprise agreements, evolving legislation, and increasing reporting obligations all contribute to a level of technical difficulty that is often underestimated.
This complexity is also reflected in emerging survey insights. The soon to be released 2026 Australian Payroll Industry Survey indicates that, on average, up to 50 percent of payroll activities are still handled manually. While systems continue to evolve, manual workarounds remain a common feature of payroll operations, increasing both workload and the potential for error.
At the same time, expectations around wage compliance have shifted significantly. Payroll is now operating in a far more visible and scrutinised environment, with regulators, executives and boards taking a much closer interest in outcome.
Survey insights also highlight that not all organisations are undertaking regular compliance reviews. While many have reviewed their payroll processes within the past 12 months, a meaningful portion report their last review was more than two years ago, with some indicating that a formal review has not been conducted at all. This creates an environment where risks can remain undetected over time.
This combination of complexity and scrutiny is where the real challenge sits.
In many cases, payroll issues are not the result of a single failure. They are the outcome of layered factors such as system limitations, manual processes, fragmented data, and gaps in governance. When these factors exist together, even well intentioned organisations can find themselves exposed.
What is becoming increasingly clear is that payroll is no longer just an operational function. It is a compliance critical function with direct links to organisational risk, employee trust and brand reputation.
This shift has important implications.
Organisations need to move beyond viewing payroll purely through an efficiency lens and instead consider capability, structure, and investment. This includes ensuring that payroll teams have the technical expertise required to interpret awards and legislation, supported by systems and processes that enable accuracy and consistency.
It also reinforces the importance of ongoing professional development and structured career pathways within payroll. As the function continues to evolve, so too does the level of skill required to perform it effectively.
The continued presence of payroll failures in the headlines is not surprising. What is changing is the context in which they occur.
APA members are well aware of the complexity and compliance expectations that sit within payroll functions. For executives and boards, however, the continued presence of payroll failures should remain firmly on the agenda. The warning signs are not going away.
