Can you save money by managing payroll in-house?

Several organizations consider managing payroll in-house. But there is certainly more to payroll than just getting payslips out every month. As a business, can you really save money by managing payroll in-house?  You need to consider some of the elements below and the costs involved therein.

Costs involved in Software:

Even if you are managing payroll in-house, you would want to deploy the right technology to achieve automation to the extent possible. Right from procuring the appropriate technology to training people, managing updates and regular maintenance, there are a lot of costs involved.  Apart from this, you also need to consider that data from your payroll systems needs to integrate with your other enterprise systems and business processes. This will involve technical expertise and will involve additional cost too.

With your payroll outsourced, you do not need to invest in any software, so no additional costs involved.

Ensuring Compliance & avoiding Penalties:

Compliance seems to get more complicated every year, especially with various updates & changes in tax & employment laws. It is absolutely imperative to comply with all legal and statutory norms for businesses to operate successfully. Errors or delays in filing all the related compliances can result in penalties.  To ensure timely and efficient compliance in your organization, you need to invest significant resources, time, and effort.

With an affordable payroll outsourcing solution you can focus on your business and leave complicated Payroll calculations & Compliance filings to the experts.


For processing payroll in-house, you need to have full time specialized people. Organisations need to spend more time on training of these resources, still for most parts of months, they remain unutilised.  If the whole payroll is based on just 1-2 employees working on it, any attrition in the function can put you back by several months. Also organisations need to deal with absenteeism, hiring, retentions, etc which indirectly affect service level of company.
Outsourcing monthly payroll processing often saves you a full headcount.  If you outsource payroll, you don’t have to worry about your payroll processing manpower calling in sick, resigning, retentions & so on.


To process payroll in-house , you need  dedicated infrastructure to run these systems. For confidentiality & security reasons, it is best to maintain dedicated servers. Besides, you need to plan for BCP (Business Continuity plan) and DRP(Disaster Recovery plan) to ensure that you have the back-ups as mandated by the govt. authorities. It is mandatory to produce this data, in case of specific audits on the topic. Organisations may be doing it manually on their own servers, but typically the solution falls short.A capable payroll outsourcing provider usually has this part covered, so that you do not have to worry about it.

If you put it all together, you will quickly realize that payroll outsourcing can actually help you save costs and a lot of hassles.

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