Choosing the best payroll software for your business

Payroll is one of those tasks that must be right every single time. One small slip-up and you’re dealing with frustrated employees, compliance headaches, and even potential fines. That’s why choosing the right payroll software isn’t just a nice-to-have; it’s essential.

But with so many options out there, how do you know which solution is best for your business? This guide will walk you through how to choose payroll software that fits your needs, whether you’re a growing small business or one of the many large companies looking for the best payroll systems to handle complex requirements.

Step 1: Identify your business pain points

Before comparing software, look at what’s not working in your current setup. Every business has different challenges, and the right payroll system should address them directly.

Look out for common challenges like:

• Endless manual data entry and double handling of information.
• Difficulty managing complex award interpretations or varied pay structures.
• Siloed systems that don’t ‘talk’ to each other.
• Reporting limitations that make compliance checks harder than they should be.

Pinpointing these gaps now will give you a clear checklist of what your next payroll system must deliver.

Step 2: Define your must-have features

Not all payroll systems offer the same functionality, so it’s important to know what’s non-negotiable. A shortlist of essential payroll system features makes it easier to find the right fit.

Key features to consider include:

• Automation: For pay runs, super contributions, and STP lodgements.
• Reporting and insights: Flexible reports and dashboards.
• Integration: Links with HR, accounting and time and attendance systems.
• Audit trails: Transparency to track changes and stay audit ready.

Defining must-have features will keep you focused on software that truly supports your business.

Step 3: Check compliance capabilities

Payroll compliance is complex and constantly changing in Australia. The best payroll software will simplify these obligations so you can stay on top of your legal requirements.

Look for systems that:

• Automatically update to reflect tax tables, superannuation and legislative changes.
• Support STP Phase 2 reporting without extra admin effort.
• Process superannuation payments on scheduled date - a set and forget option.
• Provide tools to review and verify data before submission.

Compliance shouldn’t rely on manual effort; your payroll software should do the heavy lifting.

Step 4: Evaluate usability and user experience

A payroll system is only effective if your team can use it with confidence. Clunky systems slow people down and increase the risk of errors.

Pay attention to features like:

• Clear dashboards and simple navigation.
• Easy access to employee records, pay runs, and leave balances.
• Mobile-friendly access for employees.
• Built-in help guides and ongoing, unlimited phone and email local support

A user-friendly system helps payroll run smoothly and keeps everyone on the same page.

Step 5: Prioritise security and data protection

Payroll data is highly sensitive, so security should be non-negotiable. The right system will safeguard employee and business information at every step.

Look for systems with:

• Encryption and multi-factor authentication.
• Role-based access controls.
• Regular data backups and disaster recovery protocols.
• Compliance with Australian privacy standards.

Choosing a secure provider protects your reputation and gives employees peace of mind.

Step 6: Consider the total cost of ownership

The cheapest option isn’t always the most cost-effective. Look beyond subscription fees to understand the true cost of a payroll system.

When assessing costs, factor in:

• Upfront costs: Setup, data migration, and training.
• Ongoing fees: per active employee or per payslip processed, system maintenance and support.
• Hidden costs: Integration requirements storage fees, annual fees

Evaluating the full cost helps you choose software that fits your budget now and in the future.

Step 7: Choose the right vendor, not just the software

Payroll systems are as much about support as they are tech. The right vendor will guide you through challenges and adapt as your business grows.

Things to consider include:

• Proven experience with businesses of your size and industry.
• Responsive customer support with real humans on the other end in an Australian location.
• A strong track record of product updates and ongoing improvements.

Choosing the right vendor is as important as choosing the right system.

Step 8: Test before you commit

A demo or trial is the best way to evaluate a payroll system in practice. Use this period to make sure it suits both your processes and your people

Use the trial period to:

• Run a sample pay run and generate reports.
• Test integrations with your existing systems.
• Check response times from customer support.
• Gather feedback from the staff who’ll use the software every day.

Testing upfront ensures you choose a system that lives up to its promises.

Finding the right payroll fit

Choosing the best payroll software for your business comes down to knowing your needs, understanding compliance, and partnering with a provider who can support you long-term.

Ready to see how CloudPayroll can simplify payroll for your business? Talk to our team today and explore a system that’s built for Australian companies, request a callback.