Payroll Software: What should I Use?

I have discussed general accounting software before so let’s delve into some payroll platforms available for SMEs in an attempt for me to answer a common question for SMEs: 

“What’s the best payroll software to use?”

I get to be the “agnostic” again and reply it depends. I love payroll but not enough to not want it automated so I have had experience in at least Xero, MYOB and Employment Hero (was KeyPay is part of an Australian QBO subscription)

Let's Start with Xero because the accounting part of this platform is so popular with SMEs.

Benefits of Xero Payroll:

User-Friendly Interface: Xero Payroll has an intuitive and user-friendly interface, with a Payroll dashboard to keep you on track with payroll tasks

Compliance and Accuracy: Xero Payroll stays up-to-date with Australian tax laws and regulations, ensuring that businesses stay compliant with their payroll obligations as in PAYG tax and Super are updated for the User

Employee Self-Service: XeroMe allows employees to access their payroll information, including payslips and leave balances and basic timesheets and expense claims if you need them, through a secure portal.

In platform: Xero payroll can be in Xero so no journals, not integration required your payroll flows through to your General Ledger seamlessly

Stand Alone: Xero now offers a stand alone STP compliant payroll
Limitations of Xero Payroll:

Award Interpretation: None, Payroll account needs to be configured for the correct rates and STP Phase 2 Categories so SMEs are best to obtain advice on the set up.

Payroll Reporting Limitations: Xero has a limited amount of Payroll reports

In conclusion, Xero Payroll is simple so is either a great advantage for your business or a disadvantage

Benefits of MYOB Payroll

Interface: MYOB web platform does now have a nice little payroll centre that is easy to look at and easy to use to keep you up to date with your payroll tasks.

Compliance and Accuracy: MYOB updates Super and PAYG each year according to legislation. Like Xero and Employment Hero it is STP Phase 2 compliant.

Employee Self Service: MYOB now has a handy little feature that is called MYOB Teams which allows Onboarding, rosters, timesheets and the employee mobile access to their payroll records. I haven’t used the timesheets or rosters but have found the onboarding feature is quite smooth.

In Platform: Like Xero if you are using MYOB for Accounting your payroll will be in the same platform.

Complexity: MYOB CAN be set up with a little more complexity than Xero in regards to job costing of payroll and it has a few more reports than Xero.
Limitations of MYOB Payroll:

Award Interpretation: None, Payroll account needs to be configured for the correct rates and STP Phase 2 Categories so SMEs are best to obtain advise on the set up,

No Standalone Payroll: Like Xero the advantage of having payroll “in platform” can also be a disadvantage as it can’t be used as a stand alone payroll software.

Benefits of Employment Hero Payroll

Comprehensive: Employment Hero Payroll (was KeyPay) offers a range of HR and payroll features in one platform, including employee onboarding, rosters time and attendance tracking, leave management, and payroll processing.

Employee Self-Service: The platform provides employee self-service functionality, allowing employees to view and manage their own details, leave requests, and payslips. The App has Geo tagging for the clocking in so great mobility options for your employees

Integration Capabilities: Employment Hero Payroll can integrate with other business software and accounting systems, it can populate a journal for payroll into Xero, MYOB and QBO (actually embedded in the Australian QBO platform), Netsuite, Microsoft Dynamics and probably more if you are clever with importing CSV files.

Compliance and Reporting: Apart from the usual PAYG & Super Updates, Employment Hero has great Award Interpretation built in so if you use the Award interpretation your pay rates are updated according to FWA.

Scalability: Employment Hero Payroll can cater to the needs of both small businesses and larger enterprises, making it suitable for organisations experiencing growth.

Complexity: Has as much complexity as you customise it for can be full blown rostering and hours based on Awards or just an automated salary payroll. Timesheets can come from a variety of places including Deputy and Tanda and be rounded or split according to locations or you have no timesheets at all. Employment Hero has an Implementations Team that is up to date with the software so if you are specific with your needs they should be able to advise what will work for you or not. There are also a lot of Implementation Partners available that will also advise you based on your business too. It is important to note that Employment Hero allows more than one ABN in one file, so if you are a “grouped” business this means only one payroll platform for many “businesses” under your control.
Disadvantages to Employment Hero

Learning Curve: New users might require some time to familiarise themselves with the platform and its features, because it is stand alone and because it can be complex, new users are best served leveraging of the Employment Hero or Partner Implementation

Stand Alone: this will be a disadvantage to some users as they have payroll in one platform, accounting in another.

Support: Some users have reported issues with customer support response times or availability, which can be frustrating when encountering problems or questions. Again time taken on the implementation with a partner can mitigate the need for support after the initial set up.

Pricing (to July 2023)

And then of course an SME will need to consider the dollars involved.

Xero’s stand alone product starts at $10.00 while payroll is included in your Accounting subscription on the other products. All Xero subscriptions have some payroll included up to Xero’s limits and then additional employees add to your subscription.

MYOB either includes payroll in your subscription with a limit of employees for each subscription level with additional employees being added to your subscription.

Employment Hero’s Payroll is either $5.00 per employee or $7.00 per employee depending on what features your purchase.

All products have a demo version, great sales teams and partners that should be able to answer other queries.

And as always I am one of those people to reach out to for a quick chat,

Stay safe till next time