Hi Shoba, in-house payroll is beneficial because the data is under your control. Hosted payroll is advantageous because you don't need any PC, operating system, or licensed software. Additionally, you don't need to upgrade the software regularly since the vendor will handle it. It's worth checking the prices too, as the costs of in-house payroll are increasing while those of hosted payroll are decreasing.
There is a nice presentation on SlideShare on why hosted payroll is becoming more popular. The link is given here:
http://www.slideshare.net/kallossyst...ine-hr-payroll.
Regards,
Lakshmi Narayanan