Payroll ROI Calculator

Time Saved for Each Payroll Run

The payroll ROI calculator turns your estimated time change into an annual labour cost saving. It subtracts added recurring costs to show net annual benefit. Enter your own measured times before using the result to choose a workflow.

Annual hours saved equals runs per year multiplied by current minutes less proposed minutes, divided by 60. Multiply those hours by the full hourly labour cost. Include review and correction time in both estimates so the comparison covers the same work.

The fictional starting example has 26 payroll runs each year. A change from 120 to 60 minutes saves 26 hours. At an entered labour cost of $65 an hour, the annual labour cost saving is $1,690.

Saved time creates capacity. A cash saving arises when you reduce paid hours or other costs. Work completed in the released time can have value, but the calculator does not assume extra revenue.

Costs and Payback

Net annual benefit is the labour cost saving less added annual software cost. Enter the difference between proposed and current recurring costs. Setup is a separate one-off cost, including paid training time and migration work.

With an invented annual budget of $600 and setup cost of $800, the starting example has a $1,090 net annual benefit. First-year net benefit is $290 after setup. Both costs are editable assumptions.

Indicative setup payback is setup cost divided by net annual benefit, multiplied by 12. The example shows 8.81 months. This assumes the entered workload and annual benefit accrue evenly, starting immediately.

A zero or negative net annual benefit has no positive payback. Positive benefit with zero setup cost has immediate setup payback. First-year return on costs divides first-year net benefit by added recurring cost plus setup cost. The example shows 20.71%.

When both entered costs are zero, the percentage return is undefined. The dollar benefit still applies. The model excludes financing, discounting and tax effects. Use the costs your practice bears after any goods and services tax (GST) credits. Apply the same basis to every entry.

The same calculation works for another repeated administrative task. Enter its annual workload count, current and proposed minutes, full labour cost and incremental costs. Keep the scope of work equal on both sides.

Stress-Test the Assumptions

The conservative case applies your chosen share to a positive time saving while keeping costs unchanged. At 50% of the example’s saving, annual time saved is 13 hours. Annual labour cost saving is $845 and net annual benefit is $245.

That conservative case takes 39.18 months to recover the same setup cost. If the proposed work takes longer, both cases retain the full entered time loss. A smaller achieved-saving percentage never turns a loss into an improvement.

Try fewer payroll runs, a longer review time or higher setup cost. Repeat the estimate with observed timings after a trial. Keep recurring costs separate from the one-off effort so a low setup cost cannot hide an ongoing loss.

Compare Onboarding Effort

Choose Onboarding to count clients per year and minutes per client. Enter the time spent collecting details and following up, then compare the same work under your proposed approach. Switching work types retains your entries so you can edit the assumptions yourself.

For a fictional 120 clients a year, reducing work from 45.5 to 30.25 minutes saves 30.5 hours. At $80 an hour, that is $2,440 of annual labour cost. With zero added recurring cost and $800 setup, first-year benefit is $1,640.

These are your performance assumptions. The calculator assigns no saving to a software vendor and does not predict automatic reductions in payroll or onboarding effort. Your entries stay on this page and are never sent or saved.