Jan 1, 2024 7 min read

Which Payroll Solution Suits Your Business: On-Premise or Cloud-based?

In the rapidly evolving world of global business, the choice between cloud-based and on-premise payroll solutions has become a pivotal decision for organizations. As technology advances and businesses seek more efficient and scalable solutions, the debate over which payroll processing method to adopt has intensified. In this blog post, we explore the reasons behind the growing trend toward cloud-based payroll systems, the benefits they offer, and how Mercans, a global leader in payroll technology, supports organizations in this transformative journey.

On-Premise vs Cloud-Based Payroll?

Recent studies indicate a significant shift in the payroll landscape, with 40% of organizations planning to modernize their payroll systems by transitioning from on-premise payroll methods to cloud-based solutions. The global market for cloud-based payroll software is expected to reach USD 17.39 billion by the end of 2027, reflecting the increasing recognition of the advantages offered by cloud technology.

The momentum toward cloud adoption has been further exemplified by Air India’s recent announcement of migrating its entire computational workload to the cloud, shutting down two data centers, and expecting annual savings of $1 million. This transition not only emphasizes the significant cost savings of $1 million annually for Air India but also marks a fundamental reimagination of computing, aligning with the broader trend of organizations seeking modern and efficient cloud-based payroll solutions.

Why Cloud-Based Payroll is the Preferred Choice Over On-Premise Solutions

Embracing Cloud-Based Payroll and HR systems is a transformative game-changer, offering numerous benefits that revolutionize business operations. Beyond serving as a paycheck platform, these systems act as a centralized repository for employee data, streamlining processes from onboarding to offboarding, including salary revisions and leave management. The advantages extend further to seamless compliance with evolving regulations, empowering employees through self-service features and reducing the burden on finance and HR departments. Real savings of up to 40% are realized through centralized payroll software, eliminating complex purchasing procedures and avoiding capital expenditure on servers and hardware. Cloud-based systems provide real-time data with a comprehensive dashboard for immediate and insightful insights. 

Why Cloud-Based Payroll is the Preferred Choice Over On-Premise Solutions

On the flip side, on-premise payroll and HR softwares rely on local installations within a company’s computer system. Acknowledged for reliability, this method, particularly favored in banking and government sectors, prioritizes data security by keeping information confined within the organization’s servers.

Below is a simplified comparison table highlighting key differences between Cloud-Based Payroll Solutions and On-Premise Payroll Methods:

FeatureCloud-Based PayrollOn-Premise Payroll
DeploymentHosted on external servers, accessed via the internet (cloud).Installed and runs on the company’s own servers and infrastructure.
Cost StructureSubscription-based, pay for usage.Upfront licensing costs, ongoing maintenance expenses.
ScalabilityHighly scalable, easy to upgrade or downgrade based on business needs.Limited scalability, may require significant investments for expansion.
Real-Time Data ProcessingProcesses data in real-time.Processing speed depends on local servers and network capabilities.
Paperless OperationsPromotes a paperless work environment, reducing clutter.May involve paperwork and manual record-keeping.
Ease of ImplementationFast deployment, minimal setup requirements.Requires significant preparation, setup, and integration efforts.
Maintenance ResponsibilityManaged by the service provider, automatic updates.In-house responsibility for maintenance, updates, and security.
Data SecurityStrong security measures with data stored in certified data centers.Data security is in the hands of the company, may be prone to on-site risks.
Remote AccessibilityAccessible from anywhere with an internet connection.Limited access, usually confined to the office premises.
Compliance UpdatesAutomatically updated to comply with the latest regulations.Companies need to manually update systems to ensure compliance.
Employee Self-Service FunctionsBuilt-in self-service features for employees.Limited or no self-service options for employees.
Integration and ScalabilityEasier integration with other tools and systems. Scalable to business growth.Integration may be complex, scalability challenges may arise.
Ownership of Server and DataData stored on external servers. No ownership of physical servers.Full ownership of servers and data, providing more control.
Mobility and AccessibilityAccessible from various devices, promoting mobility.Restricted accessibility, often tied to office-based workstations.
Employee Access to InformationEmployees can access their information conveniently.Limited access for employees to view and manage their data.
Record KeepingRobust record-keeping with safe, secure, and accessible storage.Record-keeping may be manual, less streamlined, and more prone to errors.

Why Switch to Cloud-Based Payroll Processing?

Transitioning to Cloud-Based Payroll Processing brings an array of advantages, providing businesses with enhanced flexibility in features, control, and cost compared to on-premise systems or outsourced agency solutions. Whether for small businesses or enterprises, the adoption of cloud payroll yields a single comprehensive solution, ensuring scalability, real-time data accessibility, and a seamless paperless process. Meeting deadlines becomes more efficient, supported by robust compliance features that keep pace with regulatory changes. Additionally, employees benefit from convenient and secure access to payroll information, encapsulating the holistic advantages of Cloud-Based Payroll Processing for businesses of all sizes.


At Mercans, we believe in the power of innovation. Our cloud-based payroll solution, HR Blizz, is a game-changer. It not only reduces payroll processing to seconds with 100% efficiency and compliance but also revolutionizes the payroll landscape. The uniqueness lies in the genesis of the product, available in three flexible models, empowering businesses to navigate the payroll landscape seamlessly. It’s not just about processing payroll; it’s about transforming the way businesses operate, adapt, and succeed in a dynamic global landscape.

Martin Kangur

Martin Kangur

Deputy Chief Technology Officer

What Advantages Does Cloud-Based Payroll Software Offer?

Cost Efficiency

Cloud-based payroll systems present a cost-effective alternative by eliminating substantial upfront investments common in self-hosting. In contrast to self-hosted solutions with potential hidden expenses, cloud payroll systems involve a transparent monthly or annual subscription fee, reducing financial burdens for businesses.

Swift Deployment and Convenience

Cloud-based payroll solutions outpace the time-intensive setup required for self-hosted systems, offering a streamlined deployment process. The simplicity of subscribing to managed payroll software and tailoring it to specific business requirements not only expedites operations but also eradicates the complexities associated with updates and maintenance.

Freed-Up Resources and Enhanced Security

Delegating maintenance, updates, and security patches to a cloud service provider liberates crucial resources within the IT and payroll departments. Cloud solutions boast robust security features, dispelling the misconception that on-premise servers inherently provide superior security.

Increased Productivity and Efficiency

The relief from routine tasks related to security patches and system maintenance, facilitated by cloud-based payroll systems, translates into heightened operational efficiency and productivity. Internal teams can redirect their focus towards strategic initiatives instead of mundane responsibilities.

Enhanced Compliance

Cloud payroll systems guarantee ongoing compliance with the latest regulatory changes and payroll rules. Designed to stay abreast of technological advancements, these systems offer businesses a dependable tool for meeting evolving compliance requirements.

Remote Accessibility

In the current landscape of remote and hybrid work models, remote accessibility is paramount. Cloud-based payroll software accommodates this trend by enabling employees to access the system from anywhere, aligning seamlessly with evolving work dynamics.

Improved Data Security

Contrary to past concerns, cloud-based payroll services boast robust data security features. Hosting payroll information in data centers equipped with advanced electronic and physical safety measures surpasses the security capabilities of most on-premise solutions.

Built-In Employee Self-Service Functions

Prioritizing a positive employee experience, cloud-based payroll systems incorporate built-in self-service functions. Employees can conveniently access their payslips and update their data online, fostering engagement and efficiency.

Easy Integration and Scalability

Inherently adaptable, cloud-based payroll software seamlessly integrates with other tools and systems. This ease of integration simplifies data exchanges between different departments, while scalability ensures businesses can

The Mercans Advantage

Mercans stands out as the premier provider of global payroll technology and workforce management solutions, uniquely attuned to the diverse needs of modern businesses. Setting a global standard, we proudly claim the title of the world’s sole native global payroll SaaS. Our offerings include a spectrum of choices, encompassing both cloud-based and on-premise payroll solutions. This diverse range enables organizations to choose the deployment model that precisely aligns with their distinctive requirements.

Our payroll engine seamlessly integrates leading business software applications, including HCM, HRM, financial, and ERP solutions. With over 100 inbound and outbound integrations, Mercans’ HR Blizz™ streamlines time and attendance data, benefits administration, and payroll solutions. This connected ecosystem enhances automation, reducing the risk of errors, improving employee satisfaction, and ensuring compliance. Whether you’re using Oracle®, Sage, SAP®, or Workday®, Mercans’ system-agnostic approach provides a middleware layer for seamless integration. Enjoy automated salary and tax calculations, streamlined payouts, and enhanced control with a user-friendly dashboard. With ISO and SOC 1 & 2 standards, GDPR compliance, and advanced security measures, Mercans offers convenience, high security, and scalability for a trusted global payroll SaaS (also known as cloud-based payroll) experience. 

Notably, Mercans also caters to organizations preferring on-premise payroll solutions. Our comprehensive offerings ensure flexibility to meet diverse business requirements. Book a demo today and experience payroll simplicity with HR Blizz™.


In today’s global business landscape, the choice between cloud-based and on-premise payroll solutions shapes efficiency, scalability, and compliance. Mercans empowers businesses with tailored options – the convenience and scalability of cloud-based systems or the control and privacy of on-premise solutions. With our commitment to payroll excellence and cutting-edge technology, Mercans is your trusted partner in modernizing payroll processes. 

Connect with us today and pave the way for success in a dynamic business world.

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