Future-Proofing Payroll: What Australian Enterprises Need to Know for 2025 and Beyond

At Deel’s recent enterprise roundtable in Sydney, 14 senior HR, finance, and payroll leaders came together to discuss the future of payroll in Australia. The event marked the preview of Deel’s inaugural Australian Payroll Research, capturing insights from over 500 payroll decision-makers and 1,000 full-time employees across the country.

The conversation reinforced one central theme: Payroll is undergoing a transformation, from a back-office function to a strategic financial service. And this transformation is happening in the midst of a growing "quiet crisis" impacting Australian payroll teams and employees alike.

The state of the modern payroll team

Deel’s research reveals a payroll function under pressure. Nearly half (49%) of payroll teams report they are understaffed. A full 92% cite staffing-related issues—like hiring, burnout, and knowledge retention—as their top challenge. This shortfall is leading to tangible consequences: 46% of teams admit to regular payroll errors, and 65% say they experience issues every time they run payroll.

As teams become more globalised, 62% of organisations use three or more payroll vendors across countries, and 58% manage payroll for employees based internationally. The fragmentation of systems is a major pain point. Over half (56%) are frustrated with disparate processes, and 40% say payroll technology itself is part of the problem.

Technology and trust: The role of AI

Encouragingly, there is movement toward technology-led transformation. AI and automation are seen as the top innovations shaping payroll, with 38% of respondents naming them the most exciting development for the future. And the benefits are clear: 62% say AI helps alleviate staffing issues, 29% cite time savings, and 27% credit it with reducing errors.

Despite this promise, adoption remains uneven. Just 47% of payroll teams are currently using AI, while 40% are still only considering it. Common concerns include implementation costs, data privacy, and compliance risks.

Yet the upside is too significant to ignore. As Tracy Angwin, Director of the Australian Payroll Association, notes in the report: “The demands on payroll teams are growing, and so too is the complexity of their role. This research empowers leaders to take bold, informed steps toward building smarter, more resilient payroll functions.”

Employees are feeling the pressure, too

This payroll evolution is happening against a backdrop of financial strain for employees. Deel’s research found that 66% of workers believe their salary increases in 2024 did not keep pace with inflation. Over half (56%) say they’ve had to prioritise immediate financial needs in the last year.

The demand for more flexible pay options is rising. Nearly 30% have used buy-now/pay-later services. Another 10% have accessed Earned Wage Access (EWA) programs, where employees can receive their pay early, either through their employer or financial institutions.

Flexibility is particularly critical to younger workers. 93% of respondents say they’d like to customise their pay package. Gen Z employees are willing to trade traditional benefits for increased flexibility, whether that’s a four-day workweek, hybrid options, or receiving part of their salary in equity or foreign currency.

Payroll as a strategic enabler

What does this mean for enterprise decision-makers?

Payroll can no longer be viewed as a routine administrative function. It is rapidly becoming a strategic lever impacting workforce planning, employee retention, wellbeing, and compliance. With 65% of teams finding errors every pay run, the cost of inaction is high.

Companies must address three core areas to future-proof their payroll operations:

1. Invest in integrated, scalable technology: Eliminate manual calculations with real-time payroll and centralised systems. A single, global platform like Deel’s can reduce errors and improve compliance

2. Empower payroll talent: Support retention by ensuring manageable workloads, clear leadership support, and access to professional development. 53% of payroll professionals cite flexible work as a top retention factor

3. Meet evolving employee needs: Embrace flexible pay cycles, early wage access, and customisable compensation models

Looking ahead

As we move toward 2030, payroll is poised to become a core financial service embedded in the fabric of workforce strategy. Deel’s research shows that the organisations that embrace this shift—leveraging technology, enhancing employee experience, and empowering payroll professionals—will be best positioned for long-term resilience.

Deel is proud to lead this conversation and support enterprises as they navigate the new world of payroll. To learn more about how Deel can support your team in Australia and beyond, get in touch with our team.