[Research Report] The cloud based payroll software market is projected to grow from US$ 10,254.01 million in 2022 to US$ 20,355.22 million by 2028; it is estimated to register a CAGR of 12.1% from 2022 to 2028.

A payroll management system has increasingly become essential to operate and control employees' salaries, and a cloud-based payroll system is a massive support for organizations operating remotely, including the payroll department. Cloud-based payroll software collects, manages, and maintains employee data to automate employee payments remotely. Also, it helps businesses reduce their operational costs while staying aligned with the latest financial and legal obligations. Using cloud-based payroll software, employees' salaries can be disbursed from anywhere securely. Also, businesses can improve their efficiency by deploying new software with minimum risk and reduced internal staffing requirements. Owing to the cost-avoidance approach for managing payroll operations through effective governance structures and adopting leading practice processes and controls, the demand for cloud-based payroll software is growing significantly with the expansion of BFSI and IT & telecom industries. Many SMEs are expected to boost the demand for cloud-based payroll software in the coming years. Thus, the growing number of SMEs is projected to offer lucrative opportunities for the cloud based payroll software market in the future.

The cloud based payroll software market in North America is segmented into Canada, the US, and Mexico. The US accounted for the largest share of the North America cloud based payroll software market. Several businesses in the US are increasingly adopting advanced payroll solutions for workforce management. The use of outdated payroll systems such as spreadsheets has decreased with the rise in the popularity of automated payroll processes based on a centralized system. These processes help them keep up with compliance standards. Running payroll processes manually has been a cumbersome task for human resources (HR) departments. Also, specific rules have been levied for payroll and taxation in the US, depending upon the state of incorporation and business operation. Generally, workers tend to resign from a company if they experience issues with their paychecks. All these difficulties faced by HR departments can be addressed by cloud-based payroll software solutions. Companies in the cloud based payroll software market are taking several new initiatives to boost the demand for cloud-based payroll software. For instance, in September 2020, ProPay Software launched a new cloud-based program to provide business owners with a cloud-based HR assistant to help alleviate business management pains. The company also aims to make business activities such as payroll and employee tracking secure and accurate.

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Published Report - Cloud Based Payroll Software Market: Strategic Insights

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Impact of COVID-19 Pandemic on Europe Cloud Based Payroll Software Market Growth

The COVID-19 pandemic had a diverse impact on various nations in Europe. Nations such as Italy and France witnessed increased cases, leading to stringent and long-term lockdowns and social isolation. The pandemic led to an increase in the need for advanced payroll systems that are accessible to employees working remotely, as processing payroll outside of the organization's IT systems and servers exposes the data to potential security breaches and hackers. Further, cloud-based payroll software addresses those limitations by securely allowing remote payroll data access, eliminating the need for payroll staff to be physically present in the office. Many cloud-based payroll software can also integrate other HR functions, such as time-tracking. Also, regular software updates ensure compliance with changes in employment laws and statutory contributions. This allows organizations to streamline standalone HR processes onto a unified HR platform, ensuring accurate and compliant payroll despite remote work arrangements. Hence, the COVID-19 pandemic supported the Europe cloud based payroll software market growth. 

Lucrative Regions for Cloud Based Payroll Software Market

Ease of System Enhancements and Updates to Drive Cloud Based Payroll Software Market Growth in Coming Years

Payroll should be managed efficiently, as inaccuracies in payroll calculation and processing might hamper employees' experience in the organization. Moreover, cloud-based payroll management software is generally easy to set up and execute timely updates. Employees can easily use this software, and the vendors also provide a training manual to understand the software. Since the software is easy to install and update, the implementation of this software grew significantly to ease the employees' work. As online payroll software is easy to use and helps navigate easily, payroll software vendors allow end users to pay as per business needs in terms of increasing or decreasing the number of users. Finance is a crucial resource for any organization, irrespective of its type, size, or industry. To implement proper payroll management, the rising demand for payroll software further accelerates the cloud based payroll software market growth.

Industry Vertical-Based Cloud Based Payroll Software Market Insights

Based on industry vertical, the cloud based payroll software market is segmented into BFSI, manufacturing, healthcare, telecom and IT, retail, hospitality, and others. The BFSI segment led the cloud-based payroll software market in 2021. BFSI is among the most significant revenue-generating verticals. In this sector, HR tools are used in resolving workplace disputes. Employees also use them to voice concerns and feedback anonymously. HR management systems, attendance, leave, and payroll management methods have changed significantly in the BFSI industry. Companies have already adopted different software and applications for managing employees' attendance and leaves. Moreover, companies in this industry use this data when calculating the payroll, which is generally a time-consuming task requiring HR executives to review payroll data, create salary accounts, process payroll, and generate pay slips for employees. All these factors have led the BFSI segment growth in the cloud based payroll software market.

Players operating in the cloud based payroll software market mainly adopt inorganic growth strategies to stay competitive in the cloud based payroll software market ecosystem.

• In December 2022, Xero Ltd launched single payroll, single touch payroll phase 2 in the market. This will be used in the business to build on its existing STP reporting and share more information with the ATO and other government agencies.
• In October 2022, ELMO Software, a cloud HR and payroll solutions company, partnered with Wellington Phoenix. This partnership aimed at improving HR and payroll management for the club through the use of ELMO's cloud HR and payroll solutions and increased visibility and brand recognition for ELMO Software.

Company Profiled

• Sage Group Plc
• Moorepay Ltd
• Automatic Data Processing Inc
• Xero Ltd
• Ceridian HCM Holdings Inc
• MYOB Australia Pty Ltd
• Microkeeper Ltd
• ELMO Software Ltd
• Webscale Pty Ltd
• Talenox Pte Ltd