An HRIS offers core HR features and solutions designed for HR teams, covering employee data, compliance, performance, and the employee lifecycle. Payroll software is the system of record for finance and payroll teams, handling pay rules, super, tax, and STP Phase 2 lodgement to the ATO. They are separate categories that integrate, not interchangeable tools.

Key takeaways

• HRIS handles people data, compliance, lifecycle workflows, performance, and reporting. Payroll software calculates pay, super, PAYG withholding, leave accruals, and lodges STP Phase 2 to the ATO.
• HR teams live in the HRIS daily. Finance and payroll teams live in payroll software daily. Forcing both teams into a single tool usually compromises one of them.
• Many “all-in-one” HR and payroll platforms are stitched together from acquisitions or white-label deals (Employment Hero acquired KeyPay, BambooHR acquired Trax Payroll, HiBob acquired Pento).
• HiBob’s 2024 acquisition of UK-based Pento does not natively serve Australian payroll requirements like modern awards, super, and STP Phase 2.
• For mid-market Australian organisations (50 to 1,000 employees), an HRIS that integrates with your existing payroll system is more scalable than an acquisition-stitched all-in-one.

What is the difference between HRIS and payroll software?

An HRIS (Human Resources Information System) is the platform HR teams use to manage employee data, compliance, onboarding, performance, and reporting. Payroll software is what finance and payroll teams use to calculate, process, and lodge employee payments. Both touch employee data, but they serve different teams, different workflows, and different sources of truth. In Australian mid-market organisations the distinction matters more than people expect. The HR team is responsible for compliance with the Fair Work Act, modern awards, employment contracts, performance reviews, and policy acknowledgements. The payroll team is responsible for accurate fortnightly pays, super contributions, PAYG withholding, leave accruals, and Single Touch Payroll Phase 2 reporting to the Australian Taxation Office. According to the ATO’s STP Phase 2 employer reporting guidelines, employers must report detailed pay categories every pay run, which is purely a payroll system responsibility. When marketing teams of ‘all-in-one’ hr vendors blur the categories (“HR and payroll in one platform”) they often paper over the fact that the underlying systems were built by different companies and connected later. That distinction shows up in pricing, implementation timelines, and the day-to-day experience of the two teams that have to use it.

What does an HRIS do?

An HRIS is the system of record for people data and everything HR teams do across the employee lifecycle. Its core scope includes the employee database, the org chart, onboarding and offboarding workflows, compliance and policy management, performance reviews, employee documents, and people analytics. It is the platform HR uses to do their job. For an Australian mid-market HR team, a modern HRIS typically covers:

• Employee records as a single source of truth for every person, position, and reporting line
• Onboarding and offboarding workflows including right-to-work checks, contract generation, and equipment provisioning
• Policy library, acknowledgements, and compliance tracking against modern awards or enterprise agreements
• Performance reviews, check-ins, goals, and 360 feedback
• People analytics and reporting on headcount, turnover, time-to-hire, eNPS, and other lifecycle metrics
• A robust integration layer with payroll, identity, ATS, LMS, engagement, benefits, and ticketing systems

Importantly, an HRIS does not run payroll. It feeds clean, current employee data into whatever payroll system the finance team uses, and pulls pay-relevant lifecycle events (new hires, terminations, role changes, leave) back out for reporting and workflow triggers.

What does payroll software do?

Payroll software is the system finance and payroll teams use to calculate, process, and lodge employee payments. In Australia that means interpreting modern awards or enterprise agreements, applying pay rules, calculating PAYG withholding and superannuation, processing termination payments, generating bank files and payslips, and lodging Single Touch Payroll Phase 2 reports to the ATO every pay run. Payroll is the system of record for pay history, pay rules, leave balances, and tax data. Examples of payroll systems Australian mid-market businesses commonly use include Xero Payroll, MYOB, Employment Hero Payroll (formerly KeyPay), ADP, Ascender, and Roubler. A good payroll system is mostly invisible when it works. It has to be precise to the cent, run on a fixed schedule, and survive ATO audits. That is a very different design centre to an HRIS, which is optimised for self-service, workflow flexibility, and reporting across the whole employee lifecycle.

Why do “all-in-one” HR and payroll platforms exist?

“All-in-one” HR and payroll platforms exist because vendors want to sell a bigger contract, and because some buyers (especially small businesses) genuinely want one tool. The marketing pitch is appealing: one login, one bill, one data source. The reality, particularly in the Australian mid-market, is that most “all-in-one” platforms are not single systems at all. They are HR products that acquired or white-labelled a separate payroll engine and connected the two with an integration. This is sometimes called an acquisition-based “Frankensystem” approach. A few well-known examples in the Australian and global market:

• Employment Hero acquired KeyPay in 2022 and has since rebranded the product as Employment Hero Payroll. (See the Employment Hero announcement.)
• ELMO Software has historically partnered with KeyPay (now Employment Hero Payroll) to deliver payroll inside its suite, rather than building its own payroll engine from scratch.
• HiBob acquired Pento in 2024, a UK-based payroll product that does not natively support Australian payroll requirements such as modern awards, super, and STP Phase 2 reporting. (See the HiBob announcement.)
• BambooHR acquired TRAXPayroll in 2018, primarily to serve the US payroll market.

These deals are commercially rational. They are also the reason the “single platform” pitch often falls apart on closer inspection. Two products, two data models, and two engineering teams stitched together over time tend to feel exactly like that to the people using them.

Are bundled HRIS and payroll platforms really one system?

Most bundled HR and payroll platforms are not one system. They are two systems sharing a login and a billing relationship, connected by an internal integration that the vendor maintains. The implication for buyers is that the data sync, edge cases, and support experience are determined by how well that integration was built and how well it is maintained, which varies widely. When you peel back an “all-in-one” platform, look for a few tell-tale signs that the payroll engine is a separate product:

• The payroll module has a different visual style, navigation, or terminology to the HRIS module
• Setting up payroll requires a separate implementation specialist or partner
• Some employee data has to be entered or maintained twice, or syncs with a delay
• Pricing is broken out into HR and payroll line items even when sold as a bundle
• The vendor’s release notes ship payroll changes on a different cadence to HR changes

None of this is fatal, and for very small businesses the trade-off can be acceptable. But pretending the two products are one will catch up with you at scale, particularly when something breaks and you cannot tell whether it is an HR issue or a payroll issue.

Should mid-market Australian businesses use all-in-one or best-of-breed?

For mid-market Australian businesses (roughly 50 to 1,000 employees), a best-of-breed approach where the HRIS integrates with a dedicated payroll system is usually more scalable than an all-in-one. The reason is simple: at this size, HR and payroll are run by different teams with different requirements, different reporting lines, and often different existing tools they trust. Forcing them into one platform optimised for neither creates more friction than it removes. According to the Australian Bureau of Statistics, around 51,000 Australian businesses employ 20 or more people, and most of those that fall into the 50 to 1,000 employee mid-market already have an established payroll system run by finance. Replacing the payroll system as part of an HRIS rollout doubles the implementation risk, doubles the change-management burden, and asks the finance team to give up a tool that has been processing pay correctly for years, often for no upside. A best-of-breed model lets each team use the tool that is best for their job:

• HR uses an HRIS optimised for employee data, compliance, performance, and lifecycle workflows
• Finance and payroll keep using the payroll system they already trust (Xero, MYOB, Employment Hero Payroll, ADP, Ascender, etc.)
• A two-way integration between the HRIS and payroll keeps employee data consistent, with the HRIS as the source of truth for people data and payroll as the source of truth for pay

This is the model Worknice recommends and is built around. We integrate cleanly with the major Australian payroll systems rather than locking customers into a bundled payroll engine they did not ask for.

What does a clean HRIS to payroll integration look like?

A clean HRIS to payroll integration is two-way, real-time or near real-time, and clearly defined about which system owns which data. The HRIS owns employee data and lifecycle events. Payroll owns pay rules, pay history, super, tax, and STP lodgement. Each system pushes the data the other needs, and neither tries to be the source of truth for something it should not own. Concretely, a well-built HRIS to payroll integration handles:

• New hires created in the HRIS automatically appearing in payroll, ready for their first pay run
• Role changes, salary changes, and promotions flowing from HRIS to payroll without re-entry
• Terminations triggering offboarding workflows in the HRIS and termination pay calculations in payroll
• Leave requests approved in the HRIS updating leave balances in payroll
• Pay history flowing back from payroll to the HRIS for reporting and analytics
• A clear audit trail showing which system made each change and when

The integration should be invisible when it works, which is the whole point of best-of-breed. HR keeps doing HR work in the HRIS, payroll keeps doing payroll work in the payroll system, and employee data stays consistent between the two without anyone copy-pasting CSVs.

How to choose between HRIS, payroll, and all-in-one

Choosing between an HRIS, a payroll system, or an all-in-one comes down to two questions: who is going to use it, and what do you already have? If HR and payroll are run by different teams (typical from around 50 employees up), and you already have a payroll system finance is happy with, a focused HRIS that integrates with that payroll is the lowest-risk, highest-fit choice. A short decision guide:

1. Under 20 employees, no dedicated HR or payroll function. An all-in-one tool can make sense. The trade-offs are smaller because nobody is specialising in either function.
2. 20 to 50 employees, growing. You probably need a real HRIS soon. Payroll is usually still in Xero or MYOB and should stay there. Look for an HRIS with strong native integrations to those platforms.
3. 50 to 1,000 employees. Best-of-breed is almost always the right answer. HR runs the HRIS, payroll runs the payroll system, and the two integrate. Avoid all-in-one platforms whose payroll engine is a recent acquisition, especially if it was built for another market.
4. 1,000-plus employees. You are at the size where enterprise suites (SAP SuccessFactors, Workday) start to make sense, but many organisations of this size still run a focused HRIS plus a dedicated payroll system because of the depth required in each.

The biggest mistake we see is mid-market buyers being sold an all-in-one because it sounded simpler, then discovering eighteen months in that the payroll module was acquired, the integration is patchy, and finance wants its old system back.

Frequently asked questions

Is HRIS the same as payroll software?

No. An HRIS is the system HR teams use to manage employee data, compliance, performance, and the employee lifecycle. Payroll software is what finance and payroll teams use to calculate pay, super, and tax, and to lodge Single Touch Payroll Phase 2 reports to the ATO. They are different products that integrate.

Can an HRIS replace my payroll system?

Generally no, and for Australian mid-market businesses you usually wouldn’t want it to. An HRIS feeds clean employee data into your existing payroll system. Payroll itself remains the source of truth for pay rules, pay history, super, and STP lodgement. Some all-in-one platforms bundle a payroll engine, but that engine is typically a separate acquired product.

Does Worknice include payroll?

No. Worknice is a focused HRIS that integrates with your existing payroll system, including Xero, MYOB, Employment Hero Payroll, MicrOpay and others. This best-of-breed approach lets HR teams use Worknice for people data and the employee lifecycle while finance and payroll teams keep using the payroll system they already trust.

What payroll systems integrate with HRIS platforms in Australia?

The most commonly integrated payroll systems for Australian mid-market HRIS deployments are Xero Payroll, MYOB Account Right, Employment Hero Payroll (formerly KeyPay) and MicrOpay.  A modern HRIS should support two-way integration with these platforms so employee data, role changes, and lifecycle events flow without re-entry.

Why do HRIS vendors acquire payroll systems?

HRIS vendors acquire payroll systems to expand their contract value and present an “all-in-one” pitch to buyers. Examples include Employment Hero acquiring KeyPay, BambooHR acquiring TRAXPayroll, and HiBob acquiring Pento. These deals create stitched-together “Frankensystems” where the HR and payroll modules remain technically separate products under one brand.

Sources

1. Australian Taxation Office. “Single Touch Payroll Phase 2 employer reporting guidelines.” ATO. Link
2. Employment Hero. “Employment Hero completes acquisition of KeyPay.” Employment Hero Blog, 2022. Link
3. HiBob. “HiBob acquires Pento to expand global payroll capability.” HiBob Press Release, 2024. Link
4. BambooHR. “BambooHR acquires TRAXPayroll.” BambooHR Press Release, 2018. Link
5. Australian Bureau of Statistics. “Counts of Australian Businesses, including Entries and Exits.” ABS. Link
6. Fair Work Ombudsman. “Awards.” Fair Work. Link