Check how quickly the one-time cost of moving from spreadsheets or a manual process to payroll software is repaid by time and fees saved.
This calculator tests whether moving from manual payroll (a spreadsheet, the CRA's Payroll Deductions Online Calculator and hand-entered bank transfers) to payroll software pays for itself, and how fast. It counts only savings you can measure.
Net yearly saving = (hours spent on payroll today − hours with software) × your loaded hourly cost + outside fees you stop paying (for example year-end slip preparation) − the yearly software subscription.
Formula. The payback period is the point where cumulative savings, growing by the percentage you enter each year, equal the net one-time cost. Net saving over the period = cumulative savings over the years compared − net one-time cost.
Worked example (illustrative). An owner pays 18 people every two weeks and spends about 4 hours per run (104 hours a year) plus 20 hours on remittances, T4s and ROEs: 124 hours at $45 = $5,580, plus $900 a year paid to an accountant for slips. With software the owner expects 1 hour per run and 6 hours of admin: 32 hours × $45 = $1,440, plus a $2,400 subscription. Net saving: $6,480 − $3,840 = $2,640 a year. With a $1,800 one-time cost and 3% growth, payback comes in about 0.68 years, and the three-year net saving is about $6,360.
Limits. The tool does not discount future savings, and the first months often save less while people learn the system. It also leaves out the value of fewer errors and penalties; see the payback guide for how to treat those.
Cost Estimates, Worked Examples and Selection Checklists
A worked payback calculation for moving from spreadsheets and the CRA calculator to payroll software, with ramp-up and break-even headcount.
Payroll Mistakes, Switching Problems and Official Sources
How to switch payroll software mid-year in Canada without double deductions or duplicate T4s: start dates, YTD balances, ROEs and parallel runs.
