Desktop-Based or Cloud-Based Payroll Software?

26 September, 2017 Enrique Estagle

In today’s rapidly-changing business world, the question is not whether or not you should get a payroll software solution for your business. Rather, it’s what type you should get.

Before getting into too much detail, the first question you should ask is whether you should get a desktop-based or a cloud-based payroll software. And understanding their differences can help you zero in on the software you will purchase.

Desktop-Based and Cloud-Based Payroll Software

Desktop-based payroll software installs itself on your computer. Usually, you purchase it as a disk or a digital download from the manufacturer’s website. The software and your payroll data are stored locally on that computer.

On the other hand, cloud-based payroll software isn’t installed on your computer. All you need to do login to the site with a web browser, and then you start using it. The software and your data are stored remotely in a secure data centre.

Internet Connectivity

Desktop-based payroll software doesn’t necessarily need constant internet access, except when sending data to organizations such as banks and tax institutions. You’ll also need to have internet access whenever the software has an update.

On the flipside, cloud-based payroll software needs to have constant internet access to work. This is because all the data and calculations needed to process payroll is located on the remote data server.


By definition, desktop-based payroll software is only located on the computer where it is installed. This means that once you’re off-site, you won’t be able to access your payroll information. Another caveat is that it’s only compatible with the operating system it was built upon. So if your business solely uses macOS or ChromeOS and the software you’re planning to purchase works only on Windows, you might have to get a Windows PC.

Cloud-based payroll software only needs a web browser to work. This means that you can use it on any type of computer (or even a tablet) anytime, wherever you may be as long as you have an internet connection. And some of these solutions also offer an employee portal that allows your staff to look at their own payroll information.


Most desktop-based payroll software encrypts the data it processes on the computer. Some can only allow you to use the software once you’ve entered a password. On top of that, it’s up to you to secure the computer itself by purchasing antivirus and other cybersecurity software.

Cloud-based payroll software hosts all your information on a data centre that has multiple layers of security. And whenever you’re accessing the software via the internet, the connection is encrypted using SSL (secure sockets layer) certificates.


More often than not, desktop-based payroll software receives its updates via the internet. It either gets updated automatically or will require you to manually check whenever an update is available. That means that you may have to wait a while for bug fixes or feature updates.

Meanwhile, cloud-based payroll software automatically updates without you even knowing it’s happening. That means that updates can happen at any time. Whenever a bug is discovered, it is fixed immediately. If there are a lot of customers asking for a certain feature, developers can make them and have it up in no time. Your user experience can get better every time you use the software.


As with other traditional software, you have to pay a huge one-time fee to purchase desktop-based payroll software. Regardless if your business has five or fifty employees, the cost remains the same. And if the company releases a brand new version of that software, you may have to buy it upfront once again.

Most cloud-based payroll software has a more cost-efficient payment scheme. Instead of you paying for the entire software upfront, they only charge you a monthly fee based on the number of employees you have at that time.

Which should you choose?

In today’s business landscape, cloud-based payroll software is clearly the better choice. Internet connectivity so ubiquitous, giving business owners and managers the ability to work anywhere. It’s more cost-efficient as you only pay based on the current number of employees you have. And it has better integration with other business software.

Payroll Integration with Tanda

Tanda’s payroll integration feature allows it to seamlessly work with the world’s leading desktop-based and cloud-based payroll software. This cuts down your processing time from hours to minutes.

Tanda works with desktop-based payroll software by exporting approved timesheets with gross wage calculation as a file, which is then imported into the software for processing. Cloud-based payroll software doesn’t need this step. Once integrated, Tanda and your cloud-based payroll software of choice sync data between each other. It gives you more time to focus on your business.

Click here to find out which payroll software works with Tanda.

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