How COVID-19 is impacting payroll processes

Business continuity issues for people and technology due to COVID-19 are leading to unprecedented challenges for payroll. Despite these unique challenges, payroll professionals are still under enormous pressure to keep operations running as smoothly as possible.

“There is not a company in the world that will be left untouched by the effects of COVID-19,” says Gary Wright, HR & Payroll Solutions Lead of professional services firm, TMF Group. “Businesses will need to adapt their systems and structures to keep up.”

A recent poll of over 2,000 payroll professionals found that 41.5 per cent said business continuity planning was the most significant challenge for their payroll function, closely followed by payroll tax complexity and staff sickness or absence.

Ensuring people are paid the right amount at the right time is crucial to maintaining the trust and motivation of employees. The success of this is being tested by the potential of reduced resources, workforce changes and the challenges of remote working. At the same time, payroll professionals must remain compliant with legislative changes that have come to the forefront due to COVID-19.

Workforce changes

Payroll teams are facing numerous changes relating to sick pay, overtime, leave and compassionate leave in particular. Critical payroll staff could become directly affected by the virus themselves or may need to take care of vulnerable or sick family members. Parental duties may also be impacted due to mandatory school closures or childcare issues. Similar to other critical business functions, when payroll staff are displaced, organisations need a clear business continuity plan.

Remote working

The challenges of working from home can also contribute to an already high-pressured environment. This is especially the case where payroll staff are in high demand due to additional complexities or when needed to step in, in the case of capacity shortages.

Another significant challenge is access to systems and other critical resources.

Many payroll professionals are still required to work remotely. This is creating new ways of working, but its success also depends an organisation’s existing virtual and digital infrastructure.

For example, the use of physical files and forms, signing and distribution, or mass printing may not be possible from home. In situations where employees are restricted from being in the office, the use of on-premise only payroll software is rendered impossible. Bank and government processes have also been impacted, and in an age of digitisation, many still rely on manual filings or lodgments.


Tax, superannuation and the legislation governing these complex topics are part of the normal daily routine for payroll professionals. In a dynamic situation such as a pandemic, regulatory changes may happen at short notice.

The JobKeeper payment was introduced in Australia to help subsidise the continuing payment of employees by businesses impacted by COVID-19. Eligible employers were required to quickly act to ensure they were ready to administer the JobKeeper payments through their payroll systems. In July 2020, the Government announced that the JobKeeper scheme will be extended for an additional six months through to 28 March 2021.

An employer needs to notify the ATO of its eligible employees and the fortnight from which the JobKeeper payment is being claimed for each eligible employee. It is essential the JobKeeper codes use the exact description specified by the ATO, or the payment of the JobKeeper subsidy may be delayed or denied.

In a recent notice on the ATO website, businesses were warned that they may have received overpayments in JobKeeper if they have incorrectly self-assessed themselves as eligible for the payment

Now more than ever, payroll business continuity is critical. Fast-changing employment and legislation coupled with remote working challenges are leading to unprecedented times and new challenges. To manage these challenges, payroll professionals need reliable technology to support their changing needs. Ultimately, getting fundamentals like payroll right is a way to provide peace of mind to your people.

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Publish date

15 Feb 2021

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