One of the most frequently asked question these days is, should we choose a cloud-based(Saas) or an on-premise software, especially when it comes to choosing a payroll software. I have seen people confused while choosing between these two platforms.
The most important reason why a person/organisation even considers an on-premise software is because of the notion that it would be less expensive than a saas software. A Saas platform has recurring pricing model while an on-premise software has a one-time purchase cost, thus a cloud-based(Saas) system is more costly. I believe this perception to be wrong because that is not the complete scenario.
There are many different types of cost involved in case of an on-premise software and the cumulative costing comparison of the two platform tells a different story.
Cloud-based Payroll pricing structure(SaaS)-
Subscription Fees(monthly/quarterly/yearly) - Has a recurring cost which the customer has to pay regularly after a particular interval.
Implementation & setup cost - This is a one-time payment which is incurred by the customer at the time of implementation of the system.
On-premise software-
License Free - This is a one time cost which is incurred by the customer to attain the license of the product.
Implementation & setup cost - A one-time payment to implement the complete software.
Maintainance cost - Cost incurred for maintenance in a specified time interval.
Upgrade cost - Cost incurred to upgrade the system in case of major upgrades.
Support cost - Cost incurred by the client to get support from the software vendor.
Customisation & Integration cost - These are the cost incurred to customise the software according to the organisation's need.
Thus the TOC(total ownership cost) in case of on-premise payroll software tend to exceed that of a Saas software.
Disclaimer - I represent KEKA HR.
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From India, Hyderabad

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