Payroll Software versus Payroll Services

Employee payroll is one essential task that every organization has to handle for running a business- but it can be quite arduous at times. For the management of payroll, there is a special team in place in the HR department that keeps track of all employee information, attendance, leaves, performance, and many more, and thus it becomes too tiring at times to keep account of every information, every month, over and over again.

To ease the task of payroll management, there is payroll software in place which every organization can adopt for overall benefit. However, just like any other service this software also has its own set of pros and cons. In this article, we’re going to address all the pros and cons of payroll service and the payroll software, and after that, we leave it up to you which method suits better for your business.

Payroll Software  

In today’s time, technology has progressed at a rapid speed, and there is software available for all business activities. One such software is the payroll system that automates the employee and payroll management of an organization. This HR software also has other features such as keeping track of employee information, attendance regularization; leave management, payroll management, task scheduling, employee performance, help-desk for employees, and many more.

The payroll system of this software simplifies the management of employee salaries and other activities such as calculating wages, setting & implementing payment methods for employees, storing payment and scheduling data, retrieving data for tax filing process, and storing data about retirement & other benefits.


  • Changes-It is easier to make all kinds of changes in this software. All the data is stored at one location, which allows easy changes.
  • Control-This software provides better internal control to the organization as it is handled by the employees of the same organization.
  • Better relationship-It provides a better relationship with the vendor.
  • Easy Access-It provides very easy access to employees and the management of an organization. It also has a separate portal for employees.


  • Transition-Learning new software can be quite difficult for employees who have always been dependent on the traditional form of logging in the details, but it is quintessential with changing times to upgrade.
  • Paid service-The software service is a paid one.

Payroll Service

Many companies prefer payroll service over managing payroll system on their own, and for this, they outsource the management of their payroll management to third-party companies. There are various companies available in the market that provide the service of payroll management at a cost.

By outsourcing this task to third-party companies, an organization relieves itself of all the responsibilities and work related to payroll management. Thus, this service looks like a good option for businesses of all sizes, however small or big.


  • No responsibilities attached-It relieves the management of all responsibilities and work related to payroll management.
  • Enhanced Assistance-These companies provide extra services such as tax filing, decision making, etc.


  • Expensive-Hiring a third party comes at its own cost and can be quite expensive for a small organization.

This article deals with both sides of the software and the service of payroll management. Now, it depends on different organizations that which options suits better for their company as it depends entirely on the needs of different businesses, as well as the existing process of your organization.

Also Read: HRMS and Payroll Software is the Need of Time

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