A payroll program is a software where you can run payroll for your employees. It is not mandatory to use a separate program for payroll, you can also do it manually.
If you have many employees, you will save a lot of time by using a payroll program to run payroll and keep track. A payroll program can provide you with reports on pay slips, outstanding holiday pay, outstanding tax, and employer’s contributions.
Many payroll programs also have the ability to report to ATO with a single touch. Single Touch Payroll (STP) is a government initiative that requires businesses to report pay details to the ATO digitally.