For years, payroll has been considered a sub-category of accounting. It was a necessary task that needed to be performed, but it was never the main focus. However, payroll has evolved into its own profession deserving of the recognition that there are specialised skills and knowledge required that don’t fit the accounting profession’s classification. No longer is payroll just about processing pays and keeping track of hours, it now encompasses everything from benefits administration to workplace relations and compliance management.  

In recognition of the importance and complexity of the payroll profession, the Australian Workforce Compliance Council has been formed in October 2022 as the voice of Payroll Practitioners and Employment Technology Providers who operationalise Australia’s Labour and related legislation. In the AWCC’s endeavour to increase the public standing, credibility and capability of Payroll Practitioners and Employment Technology Providers, the AWCC presented a submission to ABS/ANZCO in May 2023 and has been successful in the reclassification of Payroll as a profession outside of accounting and bookkeeping.  

In this blog post, we will explore the reasons why payroll has become its own profession, what has changed, what this means for businesses, and how payroll professionals can stay ahead of the curve.

The Increasing Complexity of Payroll 

The first reason why payroll has become its own industry is because of the increasing complexity of payroll itself. In the past, payroll was a straightforward process that involved calculating hours, taxes, and deductions. Today, payroll is much more complex. It involves calculating a variety of pay types, including hourly, salary, overtime, and bonuses in alignment with multiple industrial instruments. Benefits administration has become a critical component of payroll, and compliance management has also become a priority.  

Adding to this complexity of an ever-changing operations and legislative landscape, the Australian marketplace has no regulation of payroll software available on the market. The onus is effectively on companies to perform diligent testing and ensure what has been configured is compliant with legislated requirements. In other words, payroll has become too complex for it to be considered just a sub-category of accounting. Payroll is effectively a blend of accounting, workplace relations and employment law.  

The Lack of Education & Knowledge Requirements 

Payroll hasn’t historically been recognised as a profession, with regulated knowledge requirements and continuous professional development mandated as we see with accounting and law professions. There are no specialised payroll tertiary qualifications within the Australian University sector currently as there are overseas, with many overseas concepts now being taught in existing Australian tertiary qualifications that relate to payroll or through registered training organisations.  

This gap in education and knowledge has occurred in part because Payroll has not been recognised as a skilled profession at the appropriate level. The education and standards don’t equip or mandate our workforce to maintain compliance in the face of an incredibly complex industrial relations, legislation and operational landscape. Due to the lack of recognition of the profession, many companies haven’t invested in keeping their Payroll team’s knowledge up to date resulting in a lack of understanding of payroll compliance. This is where we often see long term underpayment of employees coming as a complete surprise to companies. They just didn’t understand the complexity and details required.  

The Importance of Compliance 

Another factor that has contributed to the rise of payroll as its own profession is compliance. With more legislative changes coming into play and constant operational changes, it’s essential that companies stay up to date with all changes that impact payroll and ensure they are keeping accurate records. Compliance is critical to avoid legal issues, penalties, and fines.  

Payroll companies have responded to this need by developing their expertise in compliance and providing companies with the necessary tools and guidance to stay on the right track. Many companies have outsourced the risks associated non-compliance to an outsourced payroll provider, however the risk of compliance exists through this services’ detachment to business operations. Payroll compliance isn’t optional, and there is no silver bullet solution.  

The Need for Specialisation 

Payroll has risen to become a profession through the need for specialisation. Payroll legislation, technology solutions and processes are evolving, becoming more complex and detailed. Companies need payroll professionals that specialise in payroll rather than bookkeeping or accounting skills. Rather, payroll professionals need to be trained to handle the complexities of payroll, understand the full legal landscape, and provide companies with the tools and guidance they need to pay people correctly and comply with legislation.  

The Benefits of Recognising Payroll as a Profession 

The submission by AWCC to ABS/ANZCO has resulted in the separation of Payroll into its own standalone professional classification outside of accounting and bookkeeping. The AWCC has successfully facilitated the following classification changes for the Payroll profession with the:  

– Creation of Payroll Manager, and at skill level 2, 
– Disbandment of Payroll Clerks, 
– Creation of Payroll Officer (however this is to remain at skill level 4), and 
– Tabled Removal of Payroll from ANZSCO 551 series (Accounting Clerks and Bookkeepers) and creation of a new separate classification for Payroll and its Specialisations (this is to be tabled for a later date whereby Payroll may become part of a new cluster along with Safety, Workforce Compliance and Industrial Relations).  

The purpose of the AWCC is to increase the public standing, credibility and capability of its Payroll Practitioners and Employment Technology Providers and this classification change is a major step. The AWCC conducts research and advocates on behalf of its members to all Governments on matters of national policy in relation to the operational application of labour and related legislation. These professional classification changes are the first of many positive changes to support more effective management of payroll and compliance in Australia.  

Payroll is no longer just a task that needs to be completed; it’s now a recognised profession with its own proposed specialisations. 

Up until October 2022, there was no recognised category for the profession, and no member-based association or voice to represent those who operationalise Australia’s Workforce and labour related legislation. The Australian Workforce Compliance Council was formed to provide a voice for payroll practitioners and employment technology providers within Australia, and this change to officially recognise Payroll as a profession has given Payroll professionals a platform to stand on. There is a need to advocate for greater changes to professional qualifications, standards, policies and improve consultation regarding the operationalisation of legislation.  

Companies that want to stay ahead of the curve should stay up to date with the changes to the Payroll profession, and ensure they are using solutions that are compliant with Australian legislative requirements. While professional qualifications, frameworks and standards are evolving and maturing for Payroll, partnering with payroll professionals to stay compliant and manage payroll operations effectively reduces the risk of non-compliance and ensure that the payroll function remains a critical component of the overall business strategy.  

Businesses can email or call 1300 287 213 for free first-step advice on how to ensure your Payroll processes can safeguard your Payroll compliance. Follow us on LinkedIn or sign up here to receive our articles direct to your email inbox.