Handling payroll through spreadsheets poses compliance risks for small- to medium-sized businesses (SMEs). Mistakes frequently arise when rosters change post-approval, outdated classifications are used, or timesheets are manually transferred between systems.
The risk is that no one sees a discrepancy until an employee challenges their pay. Since January 2025, intentional underpayment is a criminal offence, making it essential for SMEs to ensure accurate payroll processing.
Compliance Risks and Consequences
The Fair Work Ombudsman (FWO) recovered $453 million in unpaid wages and entitlements for more than 181,000 workers in 2025–26, up 27 per cent on the previous year. These recoveries demonstrate the cost of getting payroll wrong.
The Australian Payroll Association’s 2026 Payroll Industry Report found that 65.3 per cent identified poor or incomplete data as the biggest payroll risk. This highlights the importance of reliable payroll inputs and proactive checks.
Payroll Complexity in the Disability Sector
Australia’s modern awards, such as the Social, Community, Home Care and Disability Services Industry Award (SCHADS Award), demand more than applying a standard hourly rate. Weekend work, public holidays, overtime, allowances, minimum engagements, and shift loadings can all change what an employee is paid.
Manually interpreting those entitlements becomes difficult when employees work irregular hours or perform different duties. The FWO’s 2025–26 figures show that the regulator recovered nearly $24 million for 10,546 disability support workers and completed more than 1000 disputes.
In July 2026, disability services provider Yooralla rectified $2.05 million in underpayments to 1389 current and former workers, including superannuation and interest. The FWO identified failures to correctly apply entitlements under the organisation’s enterprise agreements.
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Importance of Integration and Automation
Integration can reduce handoffs, where errors often originate. When approved rosters, time-and-attendance records, leave, and payroll systems exchange reliable information, employees’ actual hours need not be copied repeatedly from spreadsheets or emails.
Properly configured rules can flag unusual shifts, missing breaks, and potential overtime before wages are processed. For employers covered by complex awards such as SCHADS, a connected setup can also preserve an audit trail.
Automation is not a substitute for interpretation. A system configured with an incorrect classification or superseded award rule can reproduce the same mistake across an entire workforce. Employers still need knowledgeable oversight, regular testing, and a clear process for fixing errors.
Connecting HR records, rostering, and time capture to a suitable payroll system and then checking the configuration against applicable awards eliminates unnecessary manual steps. This can be a starting point for SMEs without specialist payroll teams.
Integration and automation can help reduce errors in payroll processing. By exchanging reliable information between approved rosters, time-and-attendance records, leave, and payroll systems, employers can reduce the risk of errors and preserve an audit trail.
However, automation is not a substitute for interpretation.
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