How payroll setup usually works
A solid payroll setup begins with a short discovery to confirm structure (sole trader, company, trust, partnership), registrations (ABN, PAYG), headcount, awards, pay cycles and software. We collect employee details (TFNs, super choice, bank details, pay rates, classifications), then configure and test the system before going live.
The work typically runs in three stages:
- Foundation: confirm PAYG and super settings, select a default super fund and check STP Phase 2 status.
- Configuration: create pay calendars, earnings and deduction categories, super items, leave accruals, allowances, overtime and loadings; set up ABA bank files and approval workflows.
- Testing and handover: run a parallel pay, reconcile to source documents, correct variances, then train the operator and document the process.
Australian context to keep in view
- Register for PAYG withholding before paying salaries, wages, director fees or eligible contractor payments.
- Single Touch Payroll (STP) Phase 2 is mandatory and reports earnings, tax and super data to the ATO each pay event and at year-end finalisation (generally by 14 July).
- The Super Guarantee rate is 12% (from 1 July 2025). Configure super items and SuperStream payments to the correct default fund and accept employee super choice forms.
- Fair Work awards drive minimum pay rates, overtime, loadings, allowances and penalty rates. Map classifications and leave entitlements correctly.
- If you pay workers without an ABN in certain situations, no-ABN withholding may apply. Some industries may also trigger state payroll tax thresholds.
What’s included in a thorough payroll setup
Registrations & compliance
ABN and PAYG checks, default super fund and SuperStream setup, TFN and super choice forms, STP Phase 2 enablement and lodgement setup.
Software configuration
Pay calendars, earning categories, deductions, reimbursements, super items, leave types, pay templates and employee onboarding workflows.
Awards & rules
Classification mapping, base rates, casual loading, overtime, penalties, allowances, pay conditions and leave accrual rules aligned to Fair Work guidance.
Payments & controls
ABA bank file configuration, approvals, timesheet integrations (e.g. Deputy, Tanda), audit logs and role-based access for payroll privacy.
We also prepare handover notes, checklists and short training so your first few pay runs are confident and consistent.
Software we commonly set up
We work with leading Australian payroll solutions and their time-and-attendance add‑ons. The right choice depends on awards, rostering, job costing, projects, and reporting requirements.
- Xero Payroll
- MYOB (Business/AccountRight) payroll
- QuickBooks Online payroll
- Employment Hero payroll
- Time and attendance: Deputy, Tanda and similar tools
If you are migrating from spreadsheets or another system, we help map opening balances, year‑to‑date figures and leave liabilities so STP and EOFY reports reconcile.
What to compare before you commit
Scope
Confirm that setup covers awards, leave, STP, super and a parallel pay run—not just turning on payroll. Include onboarding templates and handover notes.
Software fit
Choose a provider fluent in your platform and add‑ons, who can explain the workflow, not just the features.
Turnaround and communication
Ask for a project timeline, testing steps, escalation paths during pay week, and how issues are documented.
Commercial fit
Decide whether you want setup only, setup plus the first few pay runs, or ongoing payroll processing and compliance lodgements.
If you are weighing options, start at the comparison pages or jump to the payroll services hub to refine your path.
Signals for timelines and cost
- Simpler: up to 10 staff, one award or salaried only, single entity, one pay cycle, no integrations—fast setup once data is complete.
- Moderate: multiple awards or sites, allowances, overtime rules, time-and-attendance integration—requires configuration and testing.
- Complex: multiple entities, back-pay, legacy cleanup, opening balance reconciliation, industry award intricacies—allow time for mapping and a parallel run.
Regardless of complexity, a short test cycle with a parallel pay run prevents rework and protects compliance.
Common payroll setup mistakes to avoid
- Incorrect STP Phase 2 mapping for income types, leave, allowances or termination payments.
- Using default super incorrectly or missing SuperStream configuration, leading to late payments.
- Misclassifying employees under awards, or missing casual loading and penalty rates.
- Leave accruals not matching NES/a ward rules, causing balances to drift.
- Skipping a parallel pay run and discovering issues during a live pay cycle.
If you have existing payroll issues, consider linking this setup with BAS or bookkeeping cleanup to stabilise reporting.
Best next steps
Write down the exact outcome you need—first live pay run, STP working, award rules configured, or a migration and cleanup. Then shortlist providers who can outline that path in plain English.
If you are hiring, see payroll for new employees. If your industry has specific rules, see payroll for construction, healthcare, or hospitality. If you’re still broad, start at the payroll services hub or the accounting services hub.
Frequently asked questions
What does payroll setup include in Australia?
It covers PAYG checks, STP Phase 2 configuration, superannuation and SuperStream, awards and pay rates, leave accruals, deductions and allowances, timesheets and approvals, ABA bank files, and end‑of‑year finalisation settings. A parallel pay run is recommended to test the setup.
How long does payroll setup take?
Straightforward setups can be ready in 3–7 business days once information is complete. Complex award rules, integrations or migrations usually take 1–3 weeks including testing.
Which payroll software can you set up?
Common platforms include Xero, MYOB, QuickBooks Online and Employment Hero, often with Deputy or Tanda for time and attendance. We recommend the stack that matches your awards, rostering and reporting needs.
Do I need a BAS agent or tax agent?
Where PAYG withholding, STP lodgements or award interpretation are involved, a registered BAS or tax agent is appropriate. Bookkeepers can implement workflows and software; registered agents handle compliance lodgements and tax-sensitive settings.