2025 Payroll Guide for Businesses in Australia: Get Payroll Right & Stay Ahead

Managing Payroll in 2025: What Business Owners Need to Know

Handling payroll isn’t just about paying employees; it’s about ensuring your business runs smoothly, avoids costly mistakes, and stays on top of new payroll laws. But let’s be real, payroll can be frustrating, time-consuming and constantly changing. With new superannuation rules, wage theft laws and digital payroll requirements, there’s a lot for business owners to keep up with in 2025.

The good news? With the right payroll setup, you can eliminate stress, pay employees accurately and on time and avoid penalties. Whether you manage payroll in-house or need payroll support, this guide will walk you through key changes, must-know deadlines and common payroll mistakes, so you can stay in control.

Common Payroll Challenges for Businesses This EOFY

Payroll mistakes can cost businesses time and money. With EOFY approaching, now’s the time to review payroll systems, check your payroll tax setup and make sure you’re meeting all employer obligations.

Payroll Changes in 2025 That Every Business Should Know

With new payroll laws rolling out, here’s what business owners need to prepare for:

• Wage Theft Laws (From 1 January 2025): Underpaying wages is now a criminal offence with severe penalties.
• Right to Disconnect (From 26 August 2024 for large businesses and 26 August 2025 for small businesses): Employees can ignore after-hours work communication unless urgent.
• ATO GST Reporting Update (From 1 April 2025): The ATO will move around 3,500 small businesses with a history of late lodgement, non-payment or incorrect GST reporting from quarterly to monthly GST reporting. This means affected businesses will need to review their bookkeeping systems and workflows to stay on top of more frequent lodgements.
• Superannuation on Parental Leave (From 1 July 2025): Parental leave payments will include super for eligible employees.
• Payday Super (From 1 July 2026): Super must be paid with wages, rather than quarterly.
• Casual Employment Reforms (From 26 August 2024): Casual workers must be offered permanent employment if they meet certain conditions.

What does this mean for your business? If you’re not reviewing contracts, payroll software and reporting processes, now is the time to act.

6 Payroll Mistakes That Cost Businesses Time and Money

These avoidable payroll mistakes can cause delays, penalties and financial headaches:

1. Missing Superannuation & Payroll Tax Updates

With superannuation increasing to 12% from 1 July 2025 and payroll tax thresholds varying by state, businesses must update their payroll systems to avoid underpayments and penalties. Overlooking these changes can lead to compliance issues and unexpected costs.

Similarly, employee entitlements, such as annual leave, long service leave and personal leave, must be accurately recorded to prevent payroll errors. A well-maintained payroll system and regular audits help ensure correct payments and keep your business on track.

2. Errors in Payroll Reporting & STP Submissions

STP (Single Touch Payroll) is mandatory, yet many businesses still make reporting errors, incorrect employee details, duplicated payroll entries or missing adjustments can result in ATO compliance issues. Reviewing reports before submission and ensuring payroll software is up to date can prevent these errors.

3. Misclassifying Employees & Incorrect Wage Payments

With casual employment laws now in effect (26 August 2024), businesses must review contracts and ensure workers are classified correctly. Misclassifying employees or failing to update wage rates can result in backpay claims, disputes and penalties.

Payroll tax thresholds vary by state and territory and are adjusted periodically. Businesses that fail to check threshold changes could be underpaying or overpaying payroll tax, leading to penalties or unnecessary costs. Consulting a payroll expert can ensure your business stays on top of these changes.

4. Late or Incorrect Employee Payments

Payroll delays or inaccurate payslips lead to employee dissatisfaction, legal issues and Fair Work claims. Businesses should ensure wages, overtime, bonuses and super contributions are processed correctly and on time.

As of 1 January 2025, wage theft (intentional underpayment of wages) is a criminal offence. Businesses must make sure they are correctly classifying employees, paying entitlements and maintaining transparent payroll records to avoid potential legal repercussions. Scheduling regular payroll reviews helps you catch issues early and keep your business on the right track.

5. Failing to Secure Payroll Data

With payroll being a prime target for cyber threats, failing to secure payroll data can lead to data breaches, fraud and financial losses. Businesses should implement multi-factor authentication (MFA), data encryption and regular security audits to safeguard sensitive payroll information.

6. Incorrect Termination & Redundancy Payments

Final pay must include accrued leave, redundancy payouts and correct tax treatment. Mistakes in termination payments can lead to employee disputes, fines and Fair Work investigations. A structured offboarding process ensures accuracy.

Important EOFY Payroll Deadlines for Businesses in 2025

Stay ahead of payroll deadlines to avoid penalties:

• Super Guarantee Rate: Increases to 12% from 1 July 2025. Make sure you update payroll settings to reflect the new super rate.
• Superannuation Guarantee Contributions: Must be received by employees’ super funds by the quarterly due dates (28th of each month following the end of the quarter). Payments can take up to two weeks to process, so don’t wait until the deadline.
• BAS (Business Activity Statement):
  • Monthly BAS: Due 21st of the following month.
  • Quarterly BAS: Due 28th of the month following the quarter (i.e. July, October, February and April).
• Monthly GST Reporting: If your business has been notified by the ATO, from 1 April 2025, you may now need to lodge GST monthly instead of quarterly. Check your reporting settings and ensure your bookkeeping is up to date.
• Annual Payroll Reconciliation: Ensure completion by 14 July.
• Single Touch Payroll (STP) Reporting: Must be submitted each payday or at the latest, on the day of payment.
• PAYG Withholding: Reported and paid by the 21st of the following month.
• Award and Wage Changes: Effective from 1 July, so ensure payroll systems are updated.

Understanding The Right to Disconnect

The Right to Disconnect law ensures that employees can ignore work-related communications outside of their normal working hours unless there is an emergency or reasonable business need. Employers should:

• Develop a policy that clarifies when after-hours communication is necessary.
• Train managers and employees to respect boundaries.
• Update employment contracts to reflect these changes.

This change prioritises work-life balance and mental health, creating a healthier workplace environment.

Why More Businesses Are Outsourcing Payroll in 2025

With payroll becoming increasingly complex, business owners are realising that managing it in-house can be costly, time-consuming and risky. Keeping up with changing tax laws, superannuation updates and employee entitlements requires constant attention, something many businesses simply don’t have the time or expertise for.

Outsourcing payroll to experts ensures accuracy, efficiency and peace of mind, helping businesses avoid costly mistakes and focus on growth. Here’s why more businesses are making the switch:

• Save time and reduce admin workload: Payroll processing, tax calculations and reporting take up valuable time. Outsourcing eliminates manual tasks, allowing business owners and finance teams to focus on strategy and operations.
• Avoid costly errors and penalties: Underpayments, incorrect super contributions and missed payroll tax obligations can lead to fines, backpay claims and legal action. Professional payroll providers ensure accuracy and keep businesses in line with payroll legislation.
• Reduce stress and payroll headaches: Handling payroll in-house means constantly staying updated on award rates, leave entitlements, tax thresholds and reporting deadlines. Outsourcing payroll eliminates the worry of making errors that could harm your business.
• Stay compliant with evolving payroll laws: With wage theft laws, STP reporting updates and the right to disconnect laws, non-compliance can have serious financial and legal consequences. Payroll experts keep businesses up-to-date and fully compliant.
• Scale payroll as your business grows: Whether you’re hiring new employees, expanding interstate or managing a fluctuating workforce, an outsourced payroll provider adjusts to your needs, ensuring seamless payroll management.
• Access expert payroll advice and technology: Professional payroll providers use advanced software, automation and reporting tools that streamline payroll processing, reduce errors, and ensure accurate employee payments every time.

For businesses looking to save time, reduce risk and simplify payroll, outsourcing is an efficient, cost-effective solution.

Get Payroll Support and Stay Ahead This EOFY

Payroll shouldn’t be a headache. Whether you run payroll in-house or need expert payroll services, Carbon is here to help.

• We handle payroll processing, STP reporting, superannuation updates and award compliance so you don’t have to.
• Get expert payroll support tailored to your business size and industry.
• Ensure your payroll is accurate, compliant and hassle-free.

Let’s make payroll stress-free. Get in touch with us today.