Three ways to run payroll
| Option | Fits when | Breaks when |
|---|---|---|
| Excel | A handful of employees in one state, with one person who knows the rules | PF, ESI, professional tax slabs and TDS are applied by hand, arrears and exits are stitched in, and one wrong formula repeats every month |
| Payroll bureau or CA firm | You want to hand the whole job over and accept a per-employee fee | You need your own data on demand, or the bureau itself runs many clients on spreadsheets |
| Payroll software | You run payroll in-house and want statutory calculations, bank files and payslips from one run | Nobody on your side owns the setup of salary structures and statutory settings |
The cost per employee
Software is usually cheaper per employee than a bureau once you pass a few dozen people, but compare like with like. WebSoftOS Payroll ERP runs on the platform plans, ₹999 per month (2 users), ₹1,999 (5 users) and ₹2,500 (10 users, 2 companies), per site and excluding GST. At 40 employees on the ₹1,999 plan that is about ₹50 per employee per month. Get written quotes from bureaus and compare the total including statutory filings, payslips and year-end forms, not just the headline fee.
Count what Excel really costs too: the days spent each month, the penalties and interest on a missed filing, and the risk that the one person who built the sheet leaves.
When to switch from Excel
- You pass 20 employees. PF generally applies from 20 employees, and ESI coverage generally starts at 10 in most states, so statutory work arrives at small sizes. Check the thresholds for your state and sector.
- You have employees in more than one state, so professional tax slabs differ.
- You regularly handle arrears, loans, bonus, gratuity or full-and-final settlements.
- You pay salaries through bank transfer files and re-key the data each month.
- The new wage definition under the Labour Codes needs you to recalculate gratuity and leave encashment. See the 50% wage rule.
If you run payroll for other companies
Payroll bureaus, CA firms and HR consultants have a second set of problems: many client companies, each with its own salary structures and statutory registrations, and client billing from the same data. Look for client companies and branches in one system, client-wise billing configuration with rate tiers, payroll invoices generated from the run, contractor settlement for labour contractors, and SLA and case tracking. See the multi-company payroll guide and the payroll outsourcing software comparison, and the buyer guide to payroll software.
Questions for any payroll vendor
- Show me PF, ESI, professional tax and TDS calculated in one run, with the old and new tax regime.
- Generate the PF ECR file and the ESI return data from the run.
- Produce a bank salary file in my bank’s format.
- Run a parallel month against my current payroll and show every discrepancy.
- How are mid-year joiners and exits handled?
- Can I export all my payroll data if I leave?
Try it first
Check one employee in the salary calculator, then see what Payroll ERP would automate. Payroll go-live typically takes 2–4 weeks, including at least one month in parallel.
Frequently asked questions
How much does payroll software cost per employee in India?
It depends on the plan and headcount. On the WebSoftOS ₹1,999 plan, 40 employees works out to about ₹50 per employee per month, excluding GST. Compare with written bureau quotes.
Should I outsource payroll to a CA or bureau?
If you want a hands-off service and accept the per-employee fee, yes. If you want your own data on demand and in-house control, payroll software is usually better. Check how many clients the bureau runs on spreadsheets.
How long does payroll software take to go live?
Typically 2–4 weeks: employees, salary structures and year-to-date figures are imported, statutory settings are configured per state, and at least one month runs in parallel.
Practical, India-specific guides from the team behind WebSoftOS cloud ERP, by Ridhi Technologies, Zirakpur, Punjab.