Work out how quickly the one-time cost of moving from manual or outsourced payroll to software is recovered from yearly net savings.
Enter the one-time cost of switching, any written setup waiver, and the net yearly saving: what you pay today (bureau fees, or the cost of staff hours spent on spreadsheets) minus the new software subscription and any extra in-house time the software needs. The tool grows the saving by the yearly percentage and shows when the cumulative saving covers the one-time cost.
Worked example (illustrative). A 60-person business pays a payroll bureau ₹400 per employee per month: 60 × ₹400 × 12 = ₹2,88,000 a year. Software at ₹150 per employee per month costs ₹1,08,000 a year, and the accounts team needs 10 more hours a month at ₹500 an hour (₹60,000 a year). Net saving = ₹2,88,000 − ₹1,08,000 − ₹60,000 = ₹1,20,000. With an ₹80,000 one-time cost, payback is about 0.67 years; over 3 years at 5% growth the net saving is about ₹2.98 lakh.
Be strict. Count only hours that really leave the payroll job, include the parallel-run months in the one-time cost, and do not count avoided penalties unless you have actually been paying them. A cheaper option that produces wrong TDS or PF is not a saving. Read the payback guide first.
Failure Patterns, Migration and Official Sources
How to move payroll to new software in India without breaking TDS, PF or ESI: timing, the data to migrate, year-to-date balances, a parallel run and reconciliation steps.
Cost Examples, TCO and Selection Checklists
Compare an outsourced payroll bureau, payroll software run in-house and spreadsheets with a CA on cost, control, risk and fit, with a 3-year illustrative sum for 40 employees.
Cost Examples, TCO and Selection Checklists
How to calculate payback when moving from manual or outsourced payroll to software in India: one-time costs, net yearly saving, two worked examples and what not to count.
