Employment Hero runs payroll for a large share of Australian SMEs, and when it is configured properly it does the job well. The problems we get called in to fix are almost never the software. They are setup decisions made in a hurry two years ago, quietly generating wrong pay, wrong super timing, or wrong STP data every cycle since. With Payday Super now live and every pay event visible to the ATO within days, configuration debt has stopped being invisible. These are the seven mistakes we find most often, roughly in order of how expensive they get.
Published: July 2026
The platform lets you create any pay category you like, which is exactly the problem. A "Saturday rate" built as a flat number in 2023 does not update when the award does, and a casual loading baked into a base rate instead of shown separately produces payslips that fail the transparency test even when the dollars are right. Every category should trace to a clause: award, level, loading, penalty. If nobody in the business can name which award and level each employee maps to, the payroll is running on folklore, and folklore is what underpayment claims are made of. This is the first thing our HR and payroll support reviews on any new file, because everything downstream inherits it.
Until this month, a super batch run "when someone remembered" was sloppy but survivable. Since 1 July 2026, super must be received by each employee's fund within 7 business days of payday, and the platform's automated super payment settings, batch timing, and clearing house processing time now all sit inside that window. The two failure modes: automated payments left off, relying on a human to trigger batches; and rejected contributions from stale fund details bouncing back with nobody assigned to fix them, with funds now returning errors within 3 business days. Set super to run with every pay event, know your clearing house's cut-off, and give bounced contributions an owner and a same-week deadline.
Single Touch Payroll Phase 2 wants earnings disaggregated: ordinary time, overtime, allowances by type, bonuses, directors' fees, salary sacrifice, each reported under the right code. A platform only reports what its pay categories are mapped to, and mappings copied across in a migration have a long half-life. Wrong categorisation flows straight into employees' tax outcomes and, from this financial year, into the qualifying-earnings and super-liability figures the ATO now matches against fund data every payday. Our STP compliance guide covers the code logic; the fix here is an annual mapping review, and immediately after any award change.
Leave settings fail quietly for years, then expensively at termination. The usual suspects: part-timers accruing as if full-time, casuals accruing annual leave they are not entitled to, personal leave accruing in days for some staff and hours for others, and leave loading switched off for award staff entitled to it. Balances also flow into your leave liability, which for a mid-sized team is a real balance-sheet number. Reconcile the platform's accrual settings against the award and the National Employment Standards once a year, and check the state wrinkles against our leave entitlements by state guide.
Tax file number declarations flow through the platform, but the settings still need a competent eye: the tax-free threshold claimed twice across two jobs, STSL study-loan flags missing (the employee's debt keeps growing while their withholding stays light), and working-holiday or foreign-resident settings defaulted to resident rates. None of these break payroll day to day; all of them surface as an angry employee with an unexpected tax bill, pointed at you. Check tax settings at onboarding and whenever an employee's circumstances change, not at year end.
Adding a contractor as an "employee" to pay them through the platform creates STP records, super expectations, and workers compensation questions that do not match the actual arrangement, and doing the reverse, paying someone who is really an employee as a contractor invoice, is the classic sham-contracting exposure. The platform will happily do either; the classification is a legal question that comes first. Run doubtful cases against our contractor vs employee cost calculator and the classification checklist before the setup, because unwinding twelve months of the wrong structure is miserable in exactly the way our guide to what happens when payroll is done late or wrong describes.
The meta-mistake behind the other six. Employment Hero gets set up by whoever was available during onboarding, then ownership diffuses: the office manager runs the pays, the accountant looks once a year, the founder approves batches on their phone. Award updates land every July, super rules changed this month, STP codes evolve, and a platform with no owner absorbs none of it. Payroll needs a named owner with the knowledge to keep configuration current, whether that is a trained person in-house or an outsourced HR and payroll function whose job it literally is. The Fair Work Ombudsman's Payday Super guidance makes the stakes plain: super now sits in the National Employment Standards, so payroll configuration errors are workplace-law problems, not just tax ones.
Pull one recent pay run and check: every pay category traceable to an award clause, super set to pay per pay event within the 7-business-day window, STP codes reviewed this financial year, leave accruals matching each employee's actual entitlement type, tax and STSL flags correct, no contractors inside payroll, and one named person who owns all of it. Anything that fails gets fixed this month, while the ATO's first-year Payday Super approach is still facilitative, not after the data has told the story for you.
Is Employment Hero compliant with Payday Super?
The platform supports payday-timed super, but compliance depends on configuration: automated super payments enabled per pay event, batch timing that lands inside the 7-business-day window, and a process for bounced contributions. The settings, not the software, determine compliance.
What are the most common Employment Hero payroll mistakes?
Pay categories that drift from the award, super settings still on quarterly-era habits, unreviewed STP Phase 2 mappings, wrong leave accrual templates, incorrect tax and STSL flags, contractors set up as employees, and no named owner of the platform.
How often should payroll platform settings be reviewed?
At minimum annually, aligned to the 1 July award and rate changes, plus immediately after any award variation, platform migration, or rule change like this month's Payday Super start.
Do STP mistakes really matter if the pay amounts are right?
Yes. Phase 2 codes drive employees' tax treatment, and from 1 July 2026 each pay event's reported qualifying earnings and super liability are matched by the ATO against fund data, so categorisation errors are now visible within days.
Who is responsible if the payroll platform is set up wrong?
The employer. Software configuration does not transfer legal responsibility for correct pay, super, and reporting, which is why the platform needs a named, competent owner.
Can casuals accrue annual leave in the platform?
They should not, and a leave template that accrues it for casuals is a common setup error. Casual loading compensates for leave entitlements; the accrual settings must match each employee's actual employment type.
What is the STSL flag and why does it matter?
It tells the platform to withhold extra for an employee's study or training loan. Left off, the employee is under-withheld all year and lands a tax bill they will associate with your payroll, not their loan.
Should I outsource payroll instead of running it in Employment Hero myself?
The platform and outsourcing are not alternatives; providers run client payroll through platforms like this one. The real question is who owns configuration and compliance. If nobody in-house can keep award mappings, super timing, and STP codes current, that ownership is worth buying.
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We review and check this guide periodically. At the time of writing (July 2026), all information was current. Scale Suite is a registered BAS Agent, not a licensed tax advisor or financial advisor. This content is general information only and does not constitute professional tax, financial, or legal advice. Some details may change over time.
Scale Suite is a Sydney-based provider of outsourced finance and HR services for Australian SMEs. We deliver bookkeeping, financial reporting, payroll processing, fractional CFO support, recruitment, employee onboarding, people and culture support, and fractional HR oversight, all as a fully embedded team that works inside your business.
Employment Hero Gold Partner, CA-qualified, and Xero Certified, we replace fragmented finance and HR processes with one responsive, senior-level function at a fraction of the cost of full-time hires. We serve growing businesses across Sydney, Melbourne, Brisbane, and Perth, with packages starting from $1,500 per month and no lock-in contracts.
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