4 free payroll software options for Australian businesses

Free payroll software sounds great, especially when you’re just starting out. If you’re running a small business or bootstrapping your way through those early months, every dollar counts. And when there’s a free tool that says it can look after your payroll? It’s mighty tempting.

Payroll’s not like email marketing or design software, though. The Australian Taxation Office (ATO) and Fair Work Ombudsman don't shrug off slip ups. There are real consequences for not getting payroll right. There's no wiggle room when it comes to STP reporting. You’ve also got to pay your staff accurately. And you’ve got to do it on time.

In this article, we go through a few of the best free payroll software options in Australia. We explain what they do well, and where they don't quite stack up. We also talk about the risks of sticking with a free tool for too long, and what to watch out for.

The information in this article is current as of April 2025. Prices and features change regularly. So, always double-check directly with payroll software providers for their most up-to-date details before making any decisions.

What is payroll software?

Payroll software is a tool that helps you pay your team properly. Good payroll software can work out what you owe each person, take care of PAYG tax, sort super, and keep records. It can also send reports to the Australian tax office through Single Touch Payroll (STP). And that part’s not optional. If you’re paying employees in Australia, you’ve got to report every pay run through STP, every time.

A solid payroll system should make that process quick and easy. You shouldn’t have to mess around with spreadsheets or second-guess tax rules. It should just work off the bat.

Now, free payroll software can do some of that. Most free payroll software lets you run basic pay runs and send off STP reports for a small number of employees (sometimes just one). That might be enough in the very early days. But beyond that? Not super helpful. Often there's no real automation, no integrations, and probably no support if you get stuck either.

Paid software steps it up. It saves you time and helps keep your payroll functioning and tidy. Of course, free payroll software might do the trick for now. But if your business is growing or things are getting more complex, it’s probably worth thinking about levelling up.

4 best free payroll software for Aussie businesses

There are a handful of free payroll tools floating around that tick the basics. For example, STP reporting, simple pay runs, maybe a few extras. We’ve rounded up a few of the well-known ones here, with a breakdown of what they offer, and where they fall short:

1. ClockOn (Starter Package)

ClockOn is a workforce management tool first, with payroll thrown into the free plan. But you’ll hit the limits pretty fast.

Key features

• ClockOn’s free Starter Package lets you run payroll and submit limited STP reports for up to 20 employees.
• You can process payroll on a weekly, fortnightly, monthly, or quarterly cycle.
• The system lets you record and manage employee timesheets.
• You can enter gross wages manually.
• It tracks leave and allowances.

Strengths

• The software is STP and ATO compliant. So, you can meet your reporting obligations without using a separate tool (for a limited time).
• It includes flexible award interpretation.

Weaknesses

• The free version only includes 27 STP submissions. After that, you’ll need to upgrade to keep using it.
• You only get one 10-minute support session. This won’t go far in the world of complex Australian payroll rules and software nuances.

2. e-PayDay Go (FREEPAY)

FREEPAY focuses on strict payroll compliance from day one. But the setup isn’t beginner-friendly and the free version only works for the tiniest teams.

Key features

• The FREEPAY plan allows you to process payroll for up to three employees at no cost.​
• It includes STP reporting.
• The software provides real-time updates of Modern Awards and classifications.
• Employees can access their payslips through a free self-service mobile app.​
• The system can manage various leave types.

Strengths

• The software notifies you about any changes in minimum award rates.
• It supports electronic lodgements directly to the Australian Taxation Office.

Weaknesses

• The free version is limited to three employees. Businesses with larger teams will need to upgrade to a paid plan.
• Some users say the system can be challenging to learn without help from e-PayDay’s support team.

3. Free Accounting Software

This is accounting software that happens to include payroll. It can be kind of handy if you know what you’re doing, but rather clunky if you don’t.

Key features

• The software is STP compliant and meets ATO reporting requirements.
• It includes built-in BAS lodgement features for businesses that need to report GST.
• The payroll section supports basic processing.
• Both a desktop and a cloud version are available.
• The cloud version supports multi-user and multi-business access.

Strengths

• There aren't any limits on the number of employees or transactions (even in the free version).
• It can lodge PAYG and TFN reports electronically to the Australian Taxation Office.

Weaknesses

• Users mention that the software isn't user-friendly. It can also feel incredibly dated in comparison to modern Australian payroll software.
• The payroll features are super basic. The software doesn't include things like automatic super payments or modern award updates. This can make it quite a risky option for Australian businesses.

4. Payroller

Payroller is a mobile-first payroll app made for sole traders or one-person teams. It's simple enough to run payroll from your phone, but not built to scale.

Key features

• You can run payroll for one employee using the free mobile app.
• The free version lets you generate payslips and email them to the employee.
• You can submit STP directly to the ATO from the mobile app.
• You can calculate PAYG tax, super, and net pay automatically.
• The mobile app lets you store basic employee details to use for future pay runs.

Strengths

• The ATO approves the payroll software (mobile and desktop) for STP submissions.
• The app can take care of all core calculations for PAYG, super, and take-home pay.

Weaknesses

• The free plan only supports one employee.
• Features like web access, timesheets, rosters, and integrations don't come with the free version.

The reality: Why ‘free’ can end up costing you more

As mentioned, free payroll software might help you get through the very early days. But if you’re still using it once things get busier, it starts to cost you. And not just time, but money (and stress) too. Here are some things to watch out for:

Hidden costs

You might not pay for the software upfront. But you'll probably pay in other ways. Unfortunately, free software usually means more manual work. For example, more time rechecking payroll data, fixing mistakes, chasing leave balances, and trying to remember who submitted what. If you miss a step, you can end up lodging your STP late. And that’s when the ATO likes to involve themselves.

Imagine that you run payroll every fortnight for three people. You’re entering everything by hand, from hours to superannuation and PAYG. It takes you over an hour each time. Paid payroll software would automate all those calculations. You'd get to save time and avoid errors from the get-go.

Compliance risks and penalties

Free tools don’t always stay up to date with payroll regulations. And even if they do, you're probably still the one responsible for knowing what’s changed. If your tax calculations are off, or you forget to apply the new minimum wage, that’s on you. You can underpay your staff without even knowing and get hit with fines and back pay with interest.

For example, say you’ve been using an outdated pay rate for six months. You didn’t catch it because the software doesn’t update awards automatically. Now you owe back pay, plus interest. It could count as wage theft. And you’ve got to explain it to your team. That’s not a good day.

Lack of features

Free payroll software often skips the stuff that makes life easier. Stuff like automation, integrations, or multi-user access. For starters, you’ll likely be the only person who can log in. You’ll be exporting payroll information by hand. You’ll be cross-checking leave balances with an Excel sheet. It works, technically. But it’s a slog.

Imagine you’ve got five staff, a casual worker on different hours, and a bookkeeper who needs access. With free software, you’re the middleman for everything. A paid platform can automate pay runs and sync with your accounting system. The result? Everyone gets what they need... and without nagging you.

Lack of support

When things go wrong (and they will), free software usually doesn’t come with the goods. You might get a help doc, a chatbot, or, if you’re lucky, a one-time 30 second support session. After that, you’re on your own.

Say your STP report fails to lodge and you’re not sure why. There’s probably going to be no number to call while the clock’s ticking on your ATO deadline. That’s when 'free' stops feeling like a win.

Not scalable

What works for one or two employees usually falls apart when you start hiring more people. Free software rarely manages with more than a handful of people. Some tools cut you off at one employee. Others cap how many STP reports you can submit before you’re forced into upgrading. Either way, free payroll software is generally not built to grow with you.

Say you've just hired your fourth team member. You go to run payroll, and your software blocks you. Now you’re scrambling for a new system, trying to move data over mid-month, and hoping you don’t miss anything. It’s not a great way to scale a business.

Signs it’s time to upgrade your payroll software

If your payroll software is starting to feel like a chore, chances are it’s holding you back big time. Here’s how to tell when your free setup has done its dash and it’s time to move on:

Your business is growing

You’re selling more, hiring faster, picking up steam... and still running payroll on a setup built for sole traders. Free software is usually built for staying small. If you're not staying small, your software shouldn't either.

A proper payroll platform can handle growth without breaking down.

Needing faster onboarding

Manually adding each new hire to your payroll system? Sending forms back and forth? Setting up super? That all takes time. If your software doesn’t support digital onboarding, you’re wasting hours doing stuff that could be sorted in a few clicks.

Modern payroll software that's part of a solid workforce management platform can collect employee details, tax info, and super details in one go. And it all happens online.

Wanting to integrate HR and finance

Payroll doesn’t live in a vacuum. It’s linked to timesheets, leave, super, tax, and your accounting software. So, if you're using a free tool that doesn’t integrate with anything else, you’re stuck copying and pasting numbers. And hoping nothing gets missed.

A paid payroll solution will usually connect with the broader HR tools it's built alongside. That means your payroll info can flow across HR, finance, and time tracking. And without you lifting a finger.

Needing additional compliance support

Rules change. Minimum wages go up. New leave types are added. If your software can’t keep up, you’re the one stuck checking Fair Work updates and updating pay rates manually. That’s a big risk, especially if you don’t have a dedicated HR person in your team.

Great payroll software for Australian businesses can help you keep up with legislation and award changes. It can take a lot of stress out of the equation!

You want less admin, not more

If payroll day fills you with dread, that’s a clear sign. Paid tools can automate most of the process. They can calculate tax, pay super, send payslips, and even lodge reports for you. If you’re spending more time on payroll than on your actual business, something’s broken.

The right payroll software will do the heavy lifting, so you can get payroll done in minutes instead of hours.

A modern, compliant payroll solution that scales with your business

Ready to stop patching payroll together with limited free tools? Rippling is here to take the stress off your plate and help keep your business compliant as you grow.

Rippling is ATO-compliant cloud payroll software that’s built for accuracy and scale. You can run payroll in just a few clicks. The system calculates PAYG withholding, superannuation, and leave automatically. Then, it submits your STP report directly to the ATO.

Need to make a change mid-pay run? No problem. You can compare past pay runs, catch any errors, and make updates before hitting 'Approve.' Rippling's focus is on reducing payroll errors by automating the manual stuff. So, no more second-guessing employee pay or reporting.

Got international employees or contractors, or planning on it? Rippling’s global payroll capabilities let you pay teams compliantly in multiple countries with a single tool.

And because Payroll sits inside Rippling’s all-in-one workforce management platform, it connects with HR, IT, and Spend management tools, effortlessly, from day one. You can manage time and attendance, onboard new hires, track expenses, and even assign devices. And you can do it all from a single dashboard.

Whether you’ve got five employees or 500, Rippling keeps things simple. You can customise pay types, manage multiple entities, and run payroll as often as you need. There are no limits and no extra fees for off-cycle runs.

For Australian small businesses, Rippling takes away the guesswork and gives you proper visibility across payroll, super, and STP reporting. For growing teams, it’s the kind of scalable payroll solution you don’t have to replace in a year’s time.

Free payroll software FAQs

Does Xero offer free single touch payroll software?

No, Xero doesn’t offer free Single Touch Payroll software. Their STP features are part of their payroll product, which is only available on paid plans.

Can you use excel for payroll?

Technically speaking, yes. But it’s a pretty risky business. You can build a spreadsheet to calculate pay and keep records. But it won’t connect to the ATO. And it definitely won’t help with STP reporting, PAYG, or super. You’ll be doing everything manually. Plus, if anything goes wrong, you’ve got no audit trail to back you up.

What is the best payroll software in Australia?

That largely comes down to what you need. The best payroll software for one business might be totally wrong for another. But if you're after automated calculations, employee access, real-time local compliance, and full control over your payroll setup, then Rippling is a pretty solid choice. It’s built for small businesses that want to do things properly from the start, and it can grow with you.

Plus, it's part of a comprehensive HR platform that gives you everything you need to manage your team in one place.

How to do payroll manually in Australia?

You’ll need to calculate each employee’s gross pay, deduct tax (PAYG), add super, issue payslips, and keep records for each pay run. Then you’ll need to report each pay event to the ATO through STP. Every time. You also have to make sure you’re using the right award rates and include all leave entitlements. And it all resets with the financial year.

So is it doable? Yes. Is it a lot to take on? Also yes.

Can you run payroll through the ATO Business Portal?

Not exactly. The ATO Business Portal doesn’t let you process or run payroll. It’s used for lodging things like BAS or activity statements. To meet your STP reporting obligations, you’ll need a payroll system that’s STP-enabled and approved by the ATO. You can’t just log in and type in the numbers. Unfortunately, it doesn’t work that way.

Disclaimer: Rippling and its affiliates do not provide tax, accounting, or legal advice. This material has been prepared for informational purposes only, and is not intended to provide or be relied on for tax, accounting, or legal advice. You should consult your own tax, accounting, and legal advisors before engaging in any related activities or transactions.