SaaS vs Managed Payroll: The trade-offs and the benefits

Payroll is the engine that keeps a company’s human capital effectively running. It is a resource heavy process, and organizations still have a tough time cutting costs while getting it right. Additionally, countless studies indicate that a timely paycheck is every employee’s first requirement in a job.

But what’s the best way to ensure everyone is happy? What are your options? Is it cost effective to outsource your payroll, or retain it in-house by employing payroll software platforms?

SaaS and Managed Payroll

With SaaS (Software-as-a-Service) delivery, you can purchase the payroll platform as a subscription from one of the reputed Payroll Outsourcing Companies, which can then be used by a team of payroll professionals in your company. This allows you to own the payroll process, especially when you have a limited employee count.

Managed or completely outsourced HR services on the other hand, leverages payroll experts outside your organization to maintain and process payroll, making it easy for you to concentrate on your core business.

SaaS Payroll delivers on time

A plug and play payroll solution is a timely introduction to most organizations, reducing downtime and avoiding disruptions in service. With a packaged solution, you can instantly integrate all your ERPs and financial tools for a robust payroll system.

HR managers can employ the intuitive interface to keep the system updated while maximizing their resource value through automation of simple tasks on the platform. Since the software is delivered as a service via the cloud, regular updates can be directly delivered to the system reducing maintenance costs.

SaaS payroll is a perfect solution for SMEs as it augments the burgeoning HR teams of these organizations.

Managed Payroll is comprehensive

Larger organizations are always looking to lower costs and improve efficiency – a double win when you partner with a trusted service provider. The pros of managed solutions can be summed up in three points:

  • Increased comfort for clients
  • Decreased pressure on in-house HR resources as deliverables are put in the hands of the provider
  • Entire lifecycle of an employee (from hire to retire) is managed on a single platform

With wholly outsourced solutions you can also expect error-free payroll cycles.

The key to a perfect payroll cycle

Often, when you think payroll, you think salaries. But ask your HR department and they will have an entirely different response. The key to successful HR lies in pre-payroll and post-payroll activities.


“Forward integration is a prime mover of managed payroll solutions”

Any engine can successfully process your payroll with the right inputs – after all it is just math and logic. Unfortunately, pain points for HR begin much before this. Onboarding, benefits management, time and attendance management, leave management and tax compliances are resource intensive and especially troublesome in economies of scale.

When you have contract employees working out of different locations, or even salaried employees working on various job codes within the company, there’s a stark difference in not just taxes and benefits compliances, but also the average pay grade for the same job.

With a wholly managed, modular solution, that can seamlessly integrate with your existing SAP (or ERP in the case of smaller organizations), you won’t have to worry about your new recruit being paid on time. The responsibility of collecting sanitized inputs rests with your payroll service provider.


Different stakeholders emphasize on different requirements after a payroll cycle. A successful managed solution will ideally fulfill all of them.

  1. EmployeesRole based access enables employees to view and download their paystubs and raise any concerns within the platform.
  2. HRThe HR department can do its work best when there’s a clear representation of the present situation. Capture deep dive reports that can drill down to the lowest levels of employee criteria and generate detailed documents.
  3. FinanceBy tapping into postings and easily extracting payroll information from the platform, the finance department can integrate payroll into their JVs or ERPs. This way, they have all the information they need, always.

The final word

Outsourcing is the quickest and most effective way of managing recurring HR tasks. When you opt for a completely managed payroll solution, you can focus better on business objectives. A SaaS payroll solution on the other hand can provide quick turnarounds and a flexible user experience with a shorter learning curve to plug-and-play instantly. Whatever your choice, always ensure that your solutions and business objectives are closely aligned.


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