Which payroll software is ideal for an Australian business owner?

If you employ staff in Australia, payroll is not a task you can afford to get wrong. Between Single Touch Payroll Phase 2 reporting obligations, the superannuation guarantee rate increase to 12% from 1 July 2025, Payday Super arriving on 1 July 2026, the Fair Work minimum wage increase of 3.5%, and the Right to Disconnect laws that now apply to all businesses regardless of size, the compliance obligations sitting behind a payroll function have never been more demanding.

The software you use to manage payroll matters not just for convenience, but for accuracy, compliance and the long-term health of your business. Businesses must update their payroll software, review their deduction allocations, and review their employee contract agreements to stay compliant with the changes taking effect in the current financial year. 

As a bookkeeper in Melbourne I often get asked to compare the main payroll-capable accounting platforms used by Australian businesses. Typically these are MYOB, Xero, QuickBooks Online and Reckon but of course there are many other alternatives. 

For full disclosure I am a XERO Champion Silver Partner, XERO Advisor Certified, XERO Payroll Specialist and MYOB Certified Consultant – in other words I work with all platforms across many different industries with no specific preference.

Regardless of which platform you use, having a professional bookkeeper manage your payroll is one of the more practical decisions you can make considering the time and complexity involved, let me explain why.

What Australian payroll software needs to do

Before comparing platforms, it is worth establishing the baseline requirements that any payroll software used by an Australian business must meet, these really aren’t optional features, for a business owner they are legal obligations.

• Single Touch Payroll Phase 2 requires employers to report detailed payroll information to the ATO each pay event, including disaggregated income types, salary sacrifice amounts, and reportable fringe benefits. Once a payslip is recorded, the year-to-date amounts are sent through the ATO’s online system. This is a legal requirement — failure to submit reports can result in fines after 28 days, and the ATO will continue to issue fines until records are brought up to date.

• Superannuation at 12% is now the legislated guarantee rate. The superannuation guarantee increased to 12% from 1 July 2025 — the last scheduled increase under the current legislation — and this change must be reflected in payroll software for all pay runs with a pay date on or after that date. 

• Payday Super, arriving 1 July 2026, will require employers to pay superannuation contributions on the same day as wages rather than quarterly. This is one of the most significant payroll compliance changes in recent years and requires software that can handle super lodgement as part of the standard pay run workflow, not as a separate process.

• Fair Work minimum wage increased by 3.5% from the current review cycle, and modern award rates have moved accordingly. The minimum wage increase takes immediate effect and must be reflected in payroll from the applicable date — failing to update pay rates exposes a business to underpayment claims.

The most popular software programs support STP2 and the 12% super rate. Where they differ is in how well they implement these requirements, how much they cost to do so and how practical the payroll workflow is in day-to-day use.

MYOB: an ideal payroll platform for an Australian business

MYOB has long been the preferred payroll platform for Australian businesses that employ staff, and the reasons for that preference are well founded. MYOB offers a key advantage over Xero when it comes to payroll services, providing unlimited payroll and more straightforward employee payment options without requiring businesses to pay for additional features they may not need. 

Payroll inclusions and pricing

MYOB’s mid-tier Pro plan allows an unlimited number of employees at an additional $2 per month per person, while Xero’s comparable plans impose hard caps on the number of employees you can pay. Even Xero’s highest plan — Ultimate 100 at $272 per month — limits pay runs to 200 employees, after which an additional per-employee charge applies. For a growing business, this is a material difference.

MYOB’s AccountRight Plus plan includes payroll for an unlimited number of employees at no additional per-employee cost, which makes it significantly more cost-effective than Xero at the medium-to-large end of the small business spectrum.

Practical workflows

From a day-to-day bookkeeping perspective, MYOB’s payroll workflow has several practical strengths. The timesheet function within the MYOB Team app allows employees to log their own hours directly from their phones, which are then imported automatically into the pay run. Entitlement calculations such as annual leave, personal leave, and long service leave can be set up as a percentage of gross hours, making ongoing accrual straightforward.

The ABA file payment function in MYOB is well-implemented, allowing payroll payments to be batched and uploaded to the business’s banking platform in a single file. This is the most efficient method of processing payroll payments for any business with more than a handful of employees.

Super clearing house

MYOB’s integrated SuperStream clearing house allows superannuation contributions to be paid to multiple funds in a single transaction directly from within the software. This is a significant time-saving feature and one that reduces the risk of super payment errors. With Payday Super arriving in July 2026, having super integrated directly into the payroll workflow rather than managed as a separate step becomes even more important.

Xero: solid payroll with plan restrictions

Xero is the most widely adopted accounting platform among Australian small businesses, and its payroll functionality is broadly compliant and capable. However, it comes with some specific limitations and workflow complexities that are worth understanding before committing to it as a payroll solution.

Payroll Inclusions and Plan Changes

Xero removed payroll from its lowest plans in 2024. The backlash from customers was swift, and Xero reinstated payroll in May 2026. On the current $75 per month Grow plan, users can pay two people and process automated super payments. To pay more than two employees, an upgrade to a higher plan is required — and the cost escalates with the number of employees being paid.

For businesses that need to process payroll for more than ten employees, Xero’s pricing exceeds MYOB’s comparable plans. Businesses paying more than twenty employees will pay more with Xero than with MYOB’s AccountRight Plus, which covers unlimited employees at a lower monthly subscription. 

Practical workflows

The Xero Me app gives employees access to their own payslips, leave balances, and timesheet submission — functionality equivalent to MYOB’s Team app. Leave requests can be reviewed and approved by managers within the app, which is genuinely useful for businesses with mobile or field-based workforces.

Superannuation in Xero

Xero’s automatic superannuation feature is gold-certified by the ATO as SuperStream compliant. Auto super sends employee contributions digitally to their nominated Australian super fund. This is a genuine strength — the automation is reliable and the certification is meaningful.

QuickBooks Online: It works but is probably not ideal

QuickBooks Online is used by a segment of the Australian market, primarily smaller businesses or those with an international parent company already using the platform. Its payroll functionality is compliant with Australian requirements — STP2, SuperStream, and the 12% guarantee rate are all supported — but it lacks the depth and Australian-specific optimisation of MYOB and Xero.

QuickBooks Payroll exists but is not as strong as Xero or MYOB for Australian requirements. Most Australian bookkeepers prefer Xero or MYOB, so finding specialist support for QuickBooks payroll is harder. This is a practical consideration: if your bookkeeper or accountant does not work regularly with QuickBooks, the payroll setup is more likely to require significant initial configuration time and may receive less informed ongoing support.

QuickBooks Online does handle award-based payroll, leave accruals, and ABA payment file generation, but the user interface for payroll is considered less intuitive than either MYOB or Xero by practitioners who work across all three platforms. For a business owner managing their own payroll without professional support, this is a meaningful disadvantage.

QuickBooks is worth considering for a micro-business — a sole trader or a business with one or two employees — where simplicity and a lower price point are the primary criteria. For any business with a more complex payroll profile, MYOB or Xero will serve the function better.

Reckon: The budget friendly option

Reckon is an Australian publicly listed company with over 35 years of presence in the local market, and its payroll product has a genuinely loyal user base among small businesses that prioritise value for money and local support.

Reckon Payroll is available from $16 per month and, unlike other payroll solutions, does not charge based on the number of employees — making it increasingly cost-effective as a business grows its headcount. For a small business paying ten or more employees, this flat-rate pricing is a significant advantage over Xero’s tiered employee-count model.

Reckon automatically pushes compliance updates — including PAYG tax tables, superannuation guarantee rate changes, and SuperStream requirements — directly into the software, reducing the risk of non-compliance when legislative changes take effect. 

Reckon Payroll is already confirmed as Payday Super ready for the 1 July 2026 requirement, with built-in SuperStream integration that allows super to be calculated, lodged, and paid directly from within the software — with contributions validated in real time and a full payment history maintained. This positions Reckon well for the single most significant payroll compliance change on the immediate horizon.

Reckon’s Mate app allows employees to add their personal, banking, tax, and super details directly from their phone, with the data syncing to Reckon Payroll to streamline onboarding. Employees can check payslips, leave balances, and payment summaries from the app. 

The trade-off with Reckon is ecosystem depth. It integrates with far fewer third-party apps than Xero or MYOB, and its accounting functionality — as opposed to its dedicated payroll module — is less sophisticated than either of the major platforms. For a business that wants a standalone, affordable payroll solution and is happy to manage its accounting separately, Reckon is a genuinely competitive option. For a business that wants an integrated accounting and payroll platform, MYOB or Xero will provide a more complete solution.

Which one should you choose to use

For a lot of Australian businesses with more than a handful of employees MYOB is the strongest payroll platform primarily because of its unlimited employee pricing structure, its integrated SuperStream clearing house, and its straightforward ABA payment workflow. 

The cost advantages over Xero become meaningful as headcount grows, and the payroll workflow — while not without its quirks — is generally faster to process on a regular basis.

• Xero is a capable second choice, particularly for businesses with simpler payroll profiles and those that value Xero’s broader accounting ecosystem and app integrations. The plan-based employee caps are a genuine constraint for growing businesses, and the superannuation workflow requires careful management to avoid errors.

• Reckon deserves more credit than it typically receives, particularly for businesses focused on payroll as a standalone function. Its flat-rate pricing, Payday Super readiness, and Australian ownership and support make it a legitimate consideration, especially for businesses that find MYOB’s broader accounting complexity more than they need.

• QuickBooks Online is the weakest of the four for Australian payroll specifically, and should generally be chosen only when there is a specific reason as an existing international relationship with the platform, or a very small and simple payroll requirement.

Why a bookkeeper should be managing your payroll regardless of your accounting software

Choosing the right software is only part of the equation. The more important question is who is operating it and whether that person has the expertise to ensure that what goes into the system is correct and this is why;

• Payroll errors are among the most costly mistakes an Australian business can make. 

• Underpaying employees creates Fair Work liability. 

• Incorrect PAYG withholding creates ATO exposure. 

• Missed or late superannuation payments trigger the Superannuation Guarantee Charge, which is not tax-deductible, attracts interest, and requires lodgement of an SGC Statement with the ATO. 

• Payday Super arriving in July 2026, the margin for error in super management narrows further — super will need to be paid each payday, not quarterly.

A bookkeeper managing your payroll brings several things that software alone cannot provide. They set the system up correctly from the start with the right pay categories, leave entitlements, super funds, and STP configurations. 

• They process each pay run with the attention required to catch anomalies such an employee whose hours look wrong, a leave balance that does not reconcile, a super calculation that has not updated following a rate change. 

• They manage the STP finalisation at year end and ensure that every employee’s payment summary is correct before it goes to the ATO. 

• They stay current with legislative changes the kind of changes that have arrived in volume in the 2025–26 financial year so that your payroll remains compliant without you needing to track every update from Fair Work, the ATO, and the Treasury.

For a business owner, the alternative is spending hours each fortnight on a function that requires precision, regulatory knowledge, and sustained attention while carrying the full compliance risk personally if something goes wrong. 

A bookkeeper removes that risk, removes that time cost, and ensures that your staff are paid correctly, on time, every time. The software is important although the person behind it is more important still.