Running payroll isn’t just about paying your team on time—it’s about compliance, accuracy, and protecting your business from costly penalties. Despite its importance, many organisations still make avoidable errors in this area. Below, we explore the most common payroll mistakes employers make and how you can avoid them.
1. Missing Payroll Deadlines
Timely payment of wages is not only a legal requirement but also critical for employee trust. Unfortunately, many businesses slip up when it comes to payroll schedules.
Common mistakes include:
- Missing regular payroll cycles, which can breach employment contracts and impact morale.
- Failing to meet the 7-day requirement for termination payments under Fair Work legislation.
- Forgetting the end-of-financial-year (EOFY) tax declaration deadline (14th July), which can cause reporting errors and ATO penalties.
How to avoid:
- Send automated reminders to employees so they can submit payroll related documents (e.g. timesheet, expense claim) on time to avoid delaying payroll process.
- Map out an annual payroll and compliance calendar so no critical deadlines are missed.
2. Incorrect Superannuation Payments
Superannuation is one of the most common areas where payroll goes wrong. Even small errors can snowball into significant liabilities.
Common mistakes include:
- Employer super contributions – currently 12%.
- Superannuation payable on extra payment like bonus/commission when they are considered Ordinary Time Earnings (OTE).
- Quarterly cap on employer super contributions – while you don’t want to underpay the employee, we do also would like to avoid overpayment too. Currently, the employer’s super contribution is capped at $7,500 per quarter.
- Deadline for super payments – while the super payments must be made at least 4 times a year at this stage, from 1st July 2026, employers will be required to pay their employees’ super at the same time as their salary and wages.
How to avoid:
- Regularly review ATO websites for updates. Review super payments regularly (e.g. monthly) to avoid overpayments.
3. Getting Leave Entitlements Wrong
Leave management can be complex, particularly for business operating across multiple states of industries.
Common mistakes include:
- Mismanaging Long Service Leave accrual, which varies between states and territories.
- Annual leave loading – if the employee is paid at the industrial award rate, the 17.5% annual leave loading is applicable.
How to avoid:
- Check entitlements against the relevant industrial award and contact the long service leave agency in relevant state or territory for confirmation. In the meantime, audit leave balances regularly (e.g. quarterly) to ensure the business is clear with its leave payment entitlement.
Payroll mistakes aren’t just administrative hiccups—they can lead to financial penalties, legal action and a loss of employee trust. By staying informed, leveraging the right payroll technology and conducting regular compliance reviews, businesses can avoid these common pitfalls.
How We Can Help
Managing payroll in-house can be complex, time-consuming, and high-risk. Our outsourced payroll services are designed to take the pressure off your business by ensuring accurate, compliant, and timely payroll processing. We also offer payroll health checks and review services to identify gaps, rectify errors, and strengthen your systems before issues escalate.
If you would like peace of mind that your payroll is being managed correctly, contact us today to discuss how we can support your business.
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