How much does HR software cost in Australia?
Reviewed by Mellow Editorial Team, HR & payroll content team
HR software in Australia typically costs between $3 and $15 per employee per month for core payroll and HR functions, though the range stretches from free tiers for very small teams to $30+ per person for enterprise-grade platforms with advanced features.
What drives the price range
The biggest factor is scope. A tool that handles payroll only costs less than one that combines payroll, leave management, onboarding, performance reviews and compliance tracking in a single platform.
Other factors that move the price:
- Number of employees. Most vendors price per employee per month. Some apply a minimum monthly fee regardless of headcount, which makes them expensive for very small businesses.
- Payroll complexity. If your team includes casual workers, multiple award rates, overtime rules or HECS/HELP repayment obligations, you need software that handles that complexity — and it usually costs more.
- STP compliance. Single Touch Payroll reporting is mandatory in Australia. Every paid product on the market should include STP-compliant reporting as standard; if it doesn't, walk away.
- Add-on modules. Rostering, expense management, learning management and advanced reporting are often sold as extras on top of a base subscription.
- Support tier. Phone support, a dedicated account manager or implementation assistance typically sit behind a higher pricing tier.
Common pricing models in Australia
Per employee per month (PEPM) is the dominant model. You pay a flat rate for each active employee, so costs scale with your headcount. This is transparent and easy to budget.
Base fee plus PEPM adds a fixed monthly platform charge on top of the per-head rate. A business with three employees can end up paying a disproportionate amount under this model.
Flat monthly tiers suit businesses with stable, small headcounts. A tier might cover up to 10, 25 or 50 employees for a set price. Straightforward to budget, but you pay for capacity you may not use.
Annual contracts usually come with a discount of 10–20% compared to month-to-month billing. Read the cancellation terms before committing; some vendors lock you in with limited exit options.
What you actually need to pay for
Before comparing quotes, map out your non-negotiables.
Payroll and STP reporting should be the baseline. The software needs to calculate PAYG withholding correctly across your pay periods, handle the Medicare levy, manage superannuation at the current Superannuation Guarantee rate of 12% of ordinary time earnings, and submit STP reports to the ATO at each pay event. Finalisation needs to happen by 14 July each year so employees can lodge their tax returns. If the software can't handle all of that reliably, the price is irrelevant.
Leave management matters from day one. The National Employment Standards set a floor of four weeks of paid annual leave for full-time employees, plus other leave entitlements. Your software should accrue leave correctly and give employees visibility over their balances.
Award interpretation is where many cheaper tools fall short. If your employees are covered by a Modern Award — which applies to most industries — the software either needs built-in award interpretation or you need to manage the complexity manually. Manual management is a compliance risk.
Redundancy tracking becomes relevant as your team grows. The NES sets a redundancy pay scale based on years of continuous service, and your records need to be accurate enough to calculate it correctly when required.
Free and low-cost options — what to know
Several providers offer free tiers, typically capped at one to five employees. These can work for a sole trader employing a small number of staff on straightforward arrangements, but they often exclude STP filing, award interpretation or leave accruals — pushing you toward a paid plan quickly.
Open-source HR tools exist but require technical setup and ongoing maintenance. For most small businesses, the hidden cost of managing that infrastructure outweighs the subscription savings.
How to evaluate total cost
The headline per-employee rate rarely tells the full story. When comparing platforms, ask:
- Is STP reporting included, or an add-on?
- Are software updates and ATO compliance changes included in the subscription?
- What does onboarding or data migration cost?
- Is there a minimum term or early-exit fee?
- How is support charged — by tier, by incident, or included?
A platform at $8 per employee per month with full STP compliance, award interpretation and responsive support may cost less in practice than a $4 option that requires workarounds, manual checking or additional tools to fill the gaps. The relevant number is total cost of staying compliant, not the subscription line item alone.
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