The Cost of Payroll vs Outsourcing.

Most businesses underestimate the real cost of processing payroll in‑house.
Even for one employee, the annual cost is higher than expected once software, administration time and compliance are included.

In‑house payroll costs (per employee, per year)

Payroll software for small employers typically ranges €159–€319 per year.

Employers spend 1–2 hours per month on payroll tasks such as RPN checks, PSR submissions, payslips and leave tracking.

When valued at standard SME admin rates, this equates to €480–€960 per year.

Additional compliance overhead arises from statutory sick pay, holiday accrual, and auto‑enrolment setup.This places the realistic in‑house cost at €700–€1,400 per employee per year, before auto‑enrolment administration is added.

Outsourced payroll costsProfessional payroll services typically charge €150–€300 per employee per year, covering all statutory reporting, payslips, leave tracking and year‑end returns.
The difference - Outsourcing payroll reduces the administrative cost of one employee by up to 50%, while ensuring full compliance and accurate reporting.