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Payroll is undergoing a profound transformation. Once considered a transactional back office function, it’s now a critical business operation under increasing scrutiny. With legislative complexity on the rise, and accuracy and compliance more important than ever, artificial intelligence (AI) is emerging as a tool to support payroll professionals rather than replace them.
The 2025 Payroll AI Adoption Report, based on data from 856 Australian employers, reveals that while interest in AI is high, actual adoption remains low. Almost half (49%) of organisations report no AI use in payroll, and only 2% have implemented it widely. The biggest barriers? Not the technology itself, but low confidence and skills among payroll teams.
Despite 74% of payroll professionals believing AI can improve compliance and reduce errors, only 5% feel confident in their understanding of AI’s application. This confidence gap is slowing adoption, even as professionals identify clear opportunities for AI in reporting, compliance monitoring and pay calculations.
Importantly, the shift to AI is not about reducing headcount, it’s about equipping payroll teams to manage complexity more effectively. Qualified payroll professionals are essential to managing risk, ensuring compliance, and building organisational trust.
The report shows that resistance to AI is more cultural than technical. Concerns around data privacy (71%) and auditability (38%) are compounded by fears of job loss and uncertainty about vendor promises. This makes clear that HR leaders must treat payroll AI adoption as a change management issue not just a software rollout.
Encouragingly, the push for AI is coming from the ground up. Payroll professionals themselves are leading the charge, recognising the potential of tools like Beryl, Australia’s first AI payroll assistant, to support accurate and timely decision making.
So what’s the path forward?
HR leaders should focus on four key actions:
- Build capability – Invest in education specifically for payroll professionals, with a focus on compliance and risk management.
- Start small – Identify low risk use cases that demonstrate early value, such as data analysis or variance reporting.
- Champion change – Embed communication and training to reduce resistance and increase trust in new tools.
- Hold vendors accountable – Ask for clear, auditable AI features that support payroll’s unique compliance needs.
Payroll professionals are not being replaced by AI but they will be replaced by professionals who use AI well. For HR leaders, this is a moment to position payroll not as a cost centre but as a strategic driver of compliance, accuracy and resilience.
Payroll’s future is intelligent, not automated. And those who invest in capability and confidence today will lead the organisations that thrive tomorrow.
For more information download the 2025 Payroll AI Adoption report today.
