Primary school principals say it is time to think about replacing the Novopay system, which was introduced a year ago.
The Principals Federation says it will take several years to develop a new payroll system and work should start now in order to avoid the problems that dogged Novopay's introduction.
Talent2, an Australian company, needed four years to design and build Novopay and it has a contract to run the system for eight years.
The Minister in charge of Novopay, Steven Joyce, said simplifying pay arrangements at schools will make it easier to introduce a new system and work on that will start next year.
Novopay underpaid, overpaid or failed to pay school staff and cost the Government $24 million in extra expenses. It also claimed the jobs of two senior staff at the Ministry of Education.
There are nearly 12,000 pay mistakes waiting to be fixed and 325 bugs remain in the system, six of them serious.
However, Radio New Zealand's education correspondent reports the error rate per pay day has improved to less than 0.5%.
School principals say while the system is better, it will need to be able to cope with the complexity of end of year and the start of next year's pay rounds, preparation for which begins in October.
Mr Joyce told Morning Report that 100 people are working on the backlog of pay transactions and fixing bugs in the system.
He said day-to-day Novopay is working and confidence in the system is improving.