How Much Does Payroll Outsourcing Cost in Australia

How this usually works

To answer how much payroll outsourcing costs for your business, price is driven by the moving parts in your pay cycle:

• Headcount and pay frequency: weekly costs more than fortnightly; onboarding and offboarding add touchpoints.
• Awards and complexity: modern awards/EBAs, penalty rates, allowances, leave loading, and overtime rules add time.
• Software stack: Xero, MYOB or QuickBooks plus time/rostering tools (Deputy, Tanda, Employment Hero) and super clearing house workflows.
• STP Phase 2: correct disaggregation and reporting of earnings, allowances and child support deductions.
• Cross‑state obligations: payroll tax thresholds and WorkCover/WorkSafe by state increase admin and checks.
• Add‑ons: super processing, payroll tax returns, timesheet approvals, HR documentation and year‑end STP finalisation.

Australian context to keep in view

• PAYG withholding and STP Phase 2 are mandatory for employers. Reporting is via an STP‑enabled payroll solution.
• Super Guarantee is currently 11.5% (from 1 July 2024) and is legislated to increase to 12% from 1 July 2025. Late or incorrect super can trigger the SG Charge.
• Fair Work compliance requires correct award interpretation, record‑keeping and payslip standards.
• Payroll tax and WorkCover rules vary by state; operating in multiple states adds registrations and reconciliations.
• Year‑end processes include STP finalisation, reconciliations to the GL, and super/leave reviews.

What to compare before you commit

Typical payroll outsourcing price ranges in Australia

• Initial setup/transition: $250–$1,500 (data review, employee onboarding, award mapping, STP configuration).
• Per pay run model: $30–$120 base per run + $5–$12 per employee per run.
• Managed monthly packages (guidance):
  • Micro (1–4 staff): $120–$280/month
  • Small (5–10): $220–$600/month
  • Medium (11–25): $450–$1,100+/month
  • 25+ staff or multi‑entity: custom
• Common add‑ons:
  • STP finalisation: $120–$450 annually (size/complexity dependent)
  • Super processing/admin: $0–$50 per run (often included in managed plans)
  • Timesheet/rostering admin: $80–$300/month
  • Award interpretation support: $150–$600/month
  • Payroll tax returns: $60–$220/month or per return
  • WorkCover reconciliation: $150–$450/year
• Clean‑ups/backlogs or error correction: $600–$3,000+ (scope‑dependent).

Worked cost examples

• Café, 12 staff, weekly, award penalties and allowances:
  • Per run example: $80 base + $7×12 = $164 per run → ≈ $656/month (4 runs) + $80–$200/month for award/timesheet admin.
  • Managed package alternative: $650–$1,000+/month depending on inclusions.
• Trades, 6 staff, fortnightly, basic allowances:
  • Per run example: $60 base + $8×6 = $108 per run → ≈ $216/month (2 runs), plus super processing if not included.
  • Managed package alternative: $220–$450/month.
• Professional services, 3 staff, monthly, simple payroll:
  • Per run example: $40 base + $6×3 = $58 per run → ≈ $58/month.
  • Managed package alternative: $120–$220/month (often includes STP, super and year‑end finalisation).

Best next steps

Write down staff count, pay frequency, awards/EBAs, software used, and any timing pressure. Decide if you want compliance‑only or fully managed payroll with timesheets, super and payroll tax handled end‑to‑end.

Then shortlist providers based on scope fit, responsiveness and price model. A clear fixed scope prevents surprises and ensures STP and super stay correct throughout the year.

Use the links below if you’re ready to move from research to action.