New research reveals skill shortages and automation among the biggest pain points for the Australian payroll sector

24 March, 2025

Australia faces the most significant payroll skills shortage in the Asia-Pacific region (APAC), with only 43% of businesses employing payroll processing professionals—the lowest rate across APAC.
36% of Australian businesses cite a lack of automated processes as the primary cause of payroll inaccuracies, while 53% report wanting to automate data entry to save time.

Melbourne, Australia, Mar. 24, 2025 – Australian businesses are grappling with critical skills shortages, rising compliance pressure, and an urgent need for automation and AI-driven payroll solutions, according to the latest global payroll survey by ADP, a leading global technology company providing human capital management solutions. With payroll playing an increasingly strategic role in business success, organisations are seeking ways to enhance efficiency, ensure compliance, and support their employees in a fast-changing business environment.

ADP’s annual report, The Potential of Payroll in 2025, surveyed senior payroll leaders from multinational organisations with over 1,000 employees. The findings highlight an urgent need for investment in payroll talent, technology, and integration with business systems to drive performance in the Australian market.

Australia ranks the lowest in APAC for payroll expertise, with 43% of businesses employing payroll processing professionals – far behind India (80%), China (62%) and Singapore (55%). Just 44.5% of Australian companies have dedicated compliance experts, compared to 64% in Japan and 57% in China. These gaps affect payroll service delivery, with one in five (20%) Australian businesses citing payroll expertise shortages as a significant operational challenge.

“Pay is the foundation of financial well-being – if payroll isn’t right, everything else suffers,” said Judy Barnett, Operations Director, ADP Australia. “As skills shortages grow and compliance becomes increasingly complex, more businesses turn to payroll outsourcing to safeguard accuracy, reduce risk, and support their teams. Payroll has become a strategic priority, and now’s the time to invest in getting it right.”

Automation and AI are becoming essential tools for businesses to manage these challenges. More than a third (36%) of Australian businesses identify the lack of automated processes as the leading cause of payroll inaccuracies. Meanwhile, 53% of companies want to automate data entry tasks to improve efficiency and reduce human error. Reducing manual workload is also a focus, with 40% of Australian businesses aiming to cut down the time payroll teams spend on data entry.

The report highlights that payroll transformation is no longer optional as compliance requirements grow and workforce shortages continue. Businesses investing in AI, automation, and workforce development will be better positioned to stay compliant, drive efficiencies, and keep their people satisfied.

“Automation is transforming payroll, streamlining processes and reducing manual errors, but its true value lies in supporting human expertise,” said Barnett. “AI can help flag potential compliance issues, but without human oversight, it might misinterpret complex award conditions or leave entitlements. Striking the right balance between technology and people is key to delivering payroll that’s accurate, fair, and adaptable.”

For more insights, access the full Potential of Payroll 2025 report here.

ENDS

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