- Desktop payroll looks cheap upfront, but maintenance, upgrades, and IT support add up fast.
- Hidden costs include hardware, backups, security, patches, and time spent installing updates.
- Cloud-based payroll shifts work off your plate: updates, backups, and security are handled for you.
- If you’re spending too much time “babysitting” payroll software, it may be time to switch.
What is desktop payroll software?
Desktop payroll software is installed on a specific computer or server at your business. You are responsible for:
- Installing the software
- Applying updates and patches
- Backing up payroll data
- Keeping the device secure and running
Having desktop software can feel “in your control,” but that control comes with ongoing responsibilities and costs that are easy to underestimate.
What is cloud-based payroll software?
Cloud-based (online) payroll software runs in your web browser. You log in from any supported device with an internet connection. The provider hosts the software and handles:
- Updates and new features
- Tax table changes
- Backups and disaster recovery
- Security
You pay a subscription fee (typically monthly), and the provider does the heavy lifting behind the scenes.
What is the difference between cloud-based and desktop payroll software?
Here’s a simple comparison chart of cloud-based vs. desktop payroll:
| Desktop Payroll Software | Cloud-Based Payroll Software | |
|---|---|---|
| Where It Lives | On your computer or server | In the cloud (access via browser) |
| Updates | You install manually | Automatic, handled by provider |
| Tax Table Changes | You download or install updates | Updated automatically |
| Backups | You’re responsible | Provider manages backups |
| Hardware Requirements | You maintain compatible devices and storage | Minimal; a device and internet |
| Access | Usually one location/device | Anywhere, often multiple devices/users |
| Security | Your antivirus, firewall, and policies | Provider handles |
| Upfront Cost | Often higher (license purchase) | Typically lower (subscription) |
| Ongoing IT Effort | Higher (maintenance, troubleshooting) | Lower (provider handles core tech tasks) |
The hidden costs of desktop payroll software
1. Time spent on maintenance and upgrades
Each update or new version of desktop payroll usually means:
- Downloading the update.
- Installing it on each computer.
- Restarting devices.
- Troubleshooting any errors or conflicts.
If you’re in charge of your small business’s IT, maintenance and upgrades take you away from sales, operations, and serving customers.
Hidden time includes:
- Tracking down update notifications
- Waiting for installs and reboots
- Calling support if something breaks mid-update
- Re-training staff when the interface changes
With cloud-based payroll, updates are handled for you. You log in and see the latest version automatically.
2. Hardware and operating system requirements
Desktop software may need:
- A certain operating system version
- Enough memory and storage
- Regular operating system patches
Over time, you may be forced to upgrade computers, buy additional storage or external drives, and replace aging hardware just to keep payroll running.
These surprise hardware purchases drive up the cost of desktop payroll software. Cloud-based payroll typically just requires a modern browser.
3. Data backups and disaster recovery
Payroll data is sensitive and essential. To avoid lost payroll data, you must do the following with desktop payroll:
- Set up regular backups
- Verify that backups work
- Store backups securely (not just a USB in a desk drawer)
- Have a plan if your main computer breaks or is stolen
On the flip side, cloud-based payroll typically includes automatic backups and redundant storage.
4. Security and compliance burdens
Desktop payroll data lives on your device. That means you’re responsible for:
- Antivirus and anti-malware software
- Firewall configuration
- Operating system security patches
- Physical security (e.g., locked doors)
- Access controls (who can log in, and from where)
The cost can be significant if a laptop with payroll data is lost, or if a machine is infected with ransomware.
5. Downtime and business interruption
When desktop payroll goes down, it’s usually at the worst time: right before payday or tax deadlines. Common causes include:
- Failed updates
- Crashed hard drives
- Corrupted files
- Power outages at your office
- Network issues with your internal server
Downtime costs you hours of time trying to fix the issue, potential late payroll or tax filings, and stress.
6. Multi-user access and remote work challenges
Desktop payroll is usually tied to one computer or a local network. That makes it harder to:
- Let multiple people help with payroll
- Run payroll from home or on the road
- Share access with your accountant or bookkeeper
Workarounds (e.g., extra licenses) add cost.
Alternatively, cloud-based payroll is built for shared, role-based access. You can give your accountant secure login. And, you can run payroll from anywhere with internet access.
How cloud-based payroll helps control these costs
Opting for cloud-based payroll over desktop payroll can:
- Reduce IT headaches: No more manual installs.
- Lower hardware pressure: Use existing devices longer.
- Improve reliability: Automatic backups.
- Strengthen security: Centralized protections and monitoring.
- Boost flexibility: Access from anywhere, with the right permissions.
You still need good processes (like reviewing payroll reports and keeping user access up to date), but you free up more of your time for your business.
When does it make sense to move off desktop payroll?
It might be time to consider cloud-based payroll if:
- You’re spending hours each month dealing with updates.
- Your payroll computer is old or unreliable.
- You worry about losing data if a machine dies.
- You want to work remotely or share access with a trusted advisor.
- Your team has grown, and payroll is getting more complex.
Frequently asked questions
Desktop payroll might be the right fit for your business if you have strong in-house IT support, prefer to run payroll offline, and have already invested in on-premise infrastructure.
However, many small businesses prefer the flexibility and lower maintenance of cloud-based payroll.
Look beyond the subscription or license fee when comparing desktop and cloud payroll software. Include costs like hardware purchases and upgrades, IT support, time spent on updates and troubleshooting, backup solutions, security tools, and downtime.
Reputable cloud providers invest heavily in security controls and encryption. You still need strong passwords, good access controls, and internal policies.
Most cloud payroll providers make switching from desktop easy by offering to help set up your employees, enter year-to-date payroll totals, and configure deductions and benefits.
Yes, your accountant can access your cloud-based payroll account if you give them access. Sharing access with your accountants is one of the biggest benefits of cloud-based payroll.
You can give them access to review payroll, pull reports, and help with year-end work.
Switch to online payroll today
If your desktop payroll is eating up time with updates, backups, and IT issues, you’re not stuck with it. Cloud-based payroll can help you simplify, cut hidden costs, and get back to running your business.
Spend less time maintaining your desktop payroll and more time on your business. Switch to Patriot’s online payroll today!
This is not intended as legal advice; for more information, please click here.
