When it comes to paying your team, many business owners ask the same question:
“Should I do payroll myself or outsource it?”
The right choice depends on your time, confidence, and risk tolerance, especially with STP Phase 2 and ever-changing compliance rules.
Let’s break down the pros and cons of each approach.
DIY Payroll: Good for control—but comes with risk
Doing your payroll in-house gives you direct control and may seem cost-effective, particularly with accounting software like Xero or MYOB.
Pros:
✅ Lower upfront cost
✅ You control timing and corrections
✅ No delay waiting for third parties
Cons:
⚠️ Requires up-to-date knowledge of tax, awards, and entitlements
⚠️ Easy to make costly errors with PAYG, super, or leave
⚠️ Time-consuming for growing businesses
Outsourced Payroll: Saves time and ensures compliance
Outsourcing payroll means handing it to a payroll bookkeeper or BAS agent. They handle the detail while you focus on your business.
Pros:
✅ Saves hours each month
✅ Ensures compliance with STP, super, and Fair Work
✅ Reduces stress and audit risk
Cons:
⚠️ Recurring cost
⚠️ Less immediate control (you’ll need to allow for cut-off times)
A hybrid model works for many
Some clients choose a middle ground: this means they still run the pay runs but rely on a professional to set things up correctly, reconcile super, and do quarterly checks.
This can be a great way to keep costs down while staying confident you’re doing things right.
Need help deciding?
If you’re not sure whether to outsource your payroll or just need someone to check your setup, I offer affordable one-off payroll reviews, STP2 compliance checks, and outsourced options.
Book a discovery chat today!
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