The four ways payroll gets done
Every payroll arrangement in Australia is a version of one of these. The prices below assume a small business with standard awards; complexity moves all of them.
1. In-house, in your software
Software only, roughly $10 to $40 a month. You run the pay run, lodge STP, process super, handle leave and onboarding.
Genuinely fine for a handful of salaried staff on one simple award. The cost is your time and the risk is award interpretation, which is where underpayment claims come from.
2. Your bookkeeper or BAS agent
About $50 to $120 per pay run plus $6 to $15 per employee per run. Often bundled into an existing bookkeeping engagement.
Usually the best value for straightforward payroll. They already hold your file, so the reconciliation and the pay run are one job rather than two, and a registered BAS agent can lodge on your behalf.
3. A dedicated payroll service
$120 to $250 a month at 1 to 4 staff, $250 to $600 at 5 to 20, $600 to $1,500+ at 21 to 50, plus a per-employee amount per run.
Buys award interpretation as a specialty rather than a sideline. Worth the premium once you have multiple awards, an enterprise agreement, heavy casual turnover or headcount past about twenty.
4. Your accountant
The dearest hourly rate on the list. Sensible for payroll tax, director payments, FBT and anything where payroll decisions affect the tax position.
Using an accountant for routine pay runs is paying senior rates for process work. Use them for the questions, not the keystrokes.
Compare the three main options for your business
Put your own headcount and award situation in. This prices the three realistic options side by side, using the Australian ranges published on this site rather than a national average.
Do it yourself
Bookkeeper or BAS agent
Payroll service
Estimates only, built from the Australian ranges published on this site. Software cost assumes a payroll-capable plan. Time estimates are for a competent operator with the awards already set up correctly. Nothing here is financial, tax or workplace relations advice.
What actually moves the price
- Pay frequency. Weekly costs roughly twice fortnightly for identical headcount, because almost everything is priced per run. If your awards and agreements permit fortnightly, it is usually the largest saving available.
- Award interpretation. One simple award is a different job to three awards plus an enterprise agreement. This is the single biggest driver of the gap between a cheap quote and an expensive one.
- Casual turnover. Onboarding and offboarding are per-head work. A business with twelve stable staff is cheaper to run than one with eight and constant churn.
- Timesheets and integration. Payroll fed by a clean rostering or time-tracking integration costs less than payroll fed by photographs of a paper sheet.
- State of the current file. Cleanup is commonly $95 to $150 an hour and is quoted separately. Providers will not usually give a fixed ongoing price until they have seen what they are inheriting.
- Payroll tax and workers compensation. Often excluded from a headline payroll quote. If you are over a state threshold, ask explicitly whether returns are included.
Eight things to check before you sign
Price is the easy part to compare, and the least likely thing to go wrong. These are the terms that decide whether the arrangement holds up.
- Award interpretation: included or excluded? Many quotes assume you supply correct rates and simply process them. That is a very different service, and the difference only shows up in a dispute.
- Who lodges STP, and under whose credentials? Confirm they are a registered BAS agent or tax agent where they are lodging on your behalf.
- Superannuation: processed or just calculated? Ask whether they submit to the clearing house and who watches the quarterly deadline, because unpaid super is not a deductible mistake.
- Error liability and professional indemnity. The employer obligation stays with you. Ask what their PI cover is, and what they do at their own cost when a remediation is their error.
- Turnaround and cut-off. How many business days before pay day do they need the data, and what happens when you miss it.
- Who answers an employee question? You, or them. This decides how much of the admin actually leaves your desk.
- Data ownership and exit. If you leave, do you get the full file including YTD figures and leave balances, in what format, and at what cost. Ask before you join, not after.
- What is explicitly extra. Get back pay, remediation, payroll tax returns, workers compensation declarations, TPAR and migrations priced up front, or they arrive as invoices later.
Where each option breaks down
In-house stops working when
A second award appears, casual turnover picks up, or the person who knows the system goes on leave in a pay week. The failure is rarely dramatic. It is a slow accumulation of small interpretation errors that surfaces years later as a back-pay calculation.
A bookkeeper stops being enough when
Award interpretation becomes the main job rather than an adjacent one. A good bookkeeper will tell you when you have crossed that line. Ask them directly, because most will be straight with you about it.
A payroll service is overkill when
You have four salaried people on one award and no complexity to interpret. You are buying capability you do not use, and your bookkeeper can run it for less as part of work they are already doing.
An accountant is the wrong tool when
The work is processing rather than judgement. Use them for payroll tax, structure, director payments and FBT, and put the pay runs somewhere cheaper.
Best next steps
- Run your numbers through the comparison above so you know which of the three you are actually choosing between.
- Ask your current bookkeeper what they would charge to take payroll on. It is often the cheapest quote you will get and the easiest to start.
- Get two quotes on identical scope, using the checklist, and insist that award interpretation is priced explicitly on both.
- If you are switching, plan for one to two pay cycles and prefer the start of a quarter.
Frequently asked questions
What are my options for getting payroll done in Australia?
Four, in rough order of cost and hand-holding: do it yourself inside your accounting software, have your bookkeeper or BAS agent run it, engage a dedicated payroll service or bureau, or have your accountant handle it. Most small businesses start with the first and move to the second once headcount or award complexity makes the time cost real.
How much do payroll services cost in Australia?
Typical ranges are $120 to $250 a month for 1 to 4 employees plus $5 to $12 per employee per pay run, $250 to $600 a month for 5 to 20 employees plus $6 to $10 per employee per run, and $600 to $1,500 or more a month for 21 to 50. Setup or migration is commonly $250 to $1,200 and EOFY STP finalisation $150 to $600.
Is a bookkeeper or a dedicated payroll service better?
A bookkeeper who already has your file is usually cheaper and simpler for straightforward payroll, because the work sits alongside the reconciliation they are already doing. A dedicated payroll service earns its price when you have multiple awards, an enterprise agreement, high casual turnover or headcount past about twenty, where award interpretation is the actual job.
Who is liable if the payroll is wrong?
You are. Engaging a provider does not transfer the employer obligation for underpayment, superannuation or Single Touch Payroll reporting. A good provider carries professional indemnity insurance and will correct their own errors, but the liability to the employee and to the ATO stays with the business. Ask what their PI cover is and what happens on a remediation before you sign.
Should I pay a fixed monthly fee or per employee per run?
Per employee per run is transparent and suits stable headcount. A fixed monthly fee suits businesses with fluctuating casual numbers, because it prices the scope rather than the count. Most Australian providers use a hybrid of a base fee plus a small per-employee amount, which is usually the fairest of the three.
What should be included as standard?
Standard pay runs, STP Phase 2 lodgement, superannuation processing and clearing house submission, payslips, leave accruals, new starter onboarding and EOFY finalisation. Award interpretation audits, back pay and remediation, payroll tax returns, workers compensation declarations and system migrations are usually extra, and should be priced before you start.
How long does it take to switch payroll providers?
Plan for one to two full pay cycles. The work is exporting year-to-date figures, mapping employees, awards and leave balances into the new system, and running a parallel pay or a reconciliation against the old one. Switching mid-financial-year is done regularly but adds YTD reconciliation work, so the start of a quarter is the easier moment.
Can I keep payroll in-house but get help with the hard parts?
Yes, and it is often the cheapest sensible option. Some businesses run their own pay runs and buy award interpretation, an annual compliance review or STP-only lodgement as needed. STP-only lodgement for a micro business is commonly $25 to $60 per event when the pay run is already processed and clean.