Cloud Based Payroll Software Market Size, Share Global Analysis Report, 2022 – 2028

Industry Insights

[215+ Pages Report] According to Facts and Factors, the global cloud-based payroll software market size was worth around USD 8,429.50 million in 2021 and is estimated to grow to about USD 12161.90 million by 2028, with a compound annual growth rate (CAGR) of approximately 6.30% over the forecast period. The report analyzes the cloud-based payroll software market's drivers, restraints/challenges, and their effect on the demands during the projection period. In addition, the report explores emerging opportunities in the cloud-based payroll software market.

Market Overview

Cloud-based payroll software is a system that uses business cloud deployment to monitor, maintain, and automate employee payments. It also communicates with other critical company systems to ensure that employees receive the right and timely compensation. Cloud payroll software is commonly used to create tax forms, deduct income garnishment, and make direct salary payments. It also gives real-time insights, analytics, and consolidated payroll data. An organization's H.R. department may measure the hours each person has worked with the effective implementation of cloud-based payroll software. This data is utilized to compute wage compensation.

The benefits of cloud-based payroll software over on-premises software, such as cost-effectiveness, propel the demand for cloud-based payroll software. Cloud-based payroll software offers smooth payroll outsourcing over on-premise systems, leave management options, workers compensation administration, and reduced tax liability. Throughout the forecast period, more people are anticipated to use cloud-based payroll software due to these benefits. Another factor driving market expansion is a rise in small- and medium-sized firms' demand for payroll software to boost productivity.

COVID-19 Impact:

The global COVID-19 outbreak has significantly impacted businesses all across the world. The lockdown imposed by many governments has positively impacted the adoption of cloud-based payroll software. Following the COVID-19 crisis, companies rely on advanced technology to undertake contactless operations, including AI-powered solutions, cloud-based technologies, automation, and app-based payroll systems. As industries transition to digitalization, demand for H.R. payroll software increases since it offers agile efficiency by removing manual activities that bog down business operations and providing real-time reporting tools.

Key Insights

• As per the analysis shared by our research analyst, the global cloud-based payroll software market value will grow at a CAGR of 6.30% over the forecast period. 
• In terms of value, the global cloud-based payroll software market size was valued at around USD 8,429.50 million in 2021 and is projected to reach USD 12161.90 million by 2028.
• By product type, the subscription-based Software segment dominated the market in 2021.
• By application, the government segment dominated the market in 2021.
• North America dominated the global cloud-based payroll software market in 2021.

Growth Drivers

• The rise in demand in the I.T. and telecommunication sector is likely to pave the way for global market growth

One of the businesses that are thought to be the most organized and efficient is the I.T. and telecommunications sector. The I.T. and telecommunications sector has both technological and human resources challenges. Using cloud-based payroll software in I.T. and telecom helps to advance automated timekeeping, automated leave management, automated performance management, compensation management, and remote workforce management. These solutions include H.R. and benefits administration, time and attendance management, and other features from a single platform. These benefits are anticipated to fuel the market for cloud-based payroll software's global rise.

Restraints

• Data security issues may hamper the global market growth.

Although cloud-based payroll software has numerous benefits, data security is now a top concern for every firm, which poses a significant obstacle to the market's expansion. Payroll data, including an employee's name, address, bank account information, social security number, and salary information, are processed and stored by third parties using cloud-based payroll software, occasionally resulting in data loss or theft. The reasons above will substantially impact the utilization of cloud-based payroll software, which will impede the market's expansion.

Opportunities

• Simplified compliance to bring up several growth opportunities

Employers can adhere to government rules thanks to cloud-based payroll software. Businesses adjust to compliance rules for P.F., ESI, P.T., I.T., and other areas with payroll. In 2019, Asanify, a startup payroll company with headquarters in Kolkata, assists SMEs with managing salaries and depositing and filing payroll compliance documents, including P.F., ESI, and TDS. It offers an AI-based platform that enables employees to obtain pay stubs and request leave via slack or WhatsApp.

Segmentation Analysis

The global cloud-based payroll software market is segregated based on product type, organization size, application, and region.

By product type, the market is divided into free & open-source software and subscription-based software. Among these, the subscription-based software segment dominated the market in 2021. The development of the market is attributed to subscription-based software that aids in efficiently planning payroll procedures and H.R. policies for both large and small and medium-sized businesses.

By organization size, the market is divided into small & medium-sized enterprises and large enterprises. Among these, the small & medium-sized enterprises segment dominated the market in 2021. It is anticipated to expand at the fastest rate over the forecast year due to these companies' expanding presence in emerging economies and growing public knowledge of their talented and well-organized workforce. The global market for cloud-based payroll software is now being driven by SMEs' increasing adoption of cloud-based solutions to increase productivity at work.

The market is divided into government, I.T. sector, defense, BFSI (banking, financial services, and insurance), and education. Over the forecast period, the government segment is expected to develop at the fastest rate in 2021. Automating government forms is possible with cloud-based payroll software. It offers the choice to evade manually filling out paperwork and the long lines involved in processing those forms. This market sector is anticipated to be the most alluring during the forecast period because of its advantages, such as the automatic and precise computation of the amount each employee should pay. 

Report Scope

Recent Developments

• In February 2021 - Gusto, a cloud-based payroll provider, and works, a software provider, have partnered to assist service industry workers with payroll, human resource administration, and employee benefits.
• In April 2020, to offer the most advanced human capital management (HCM) and workforce management services globally, ultimate software announced that its merger with Kronos incorporated had been completed. With an unmatched combination of cloud solutions, this merger enables businesses in various sectors to manage their workforces more skillfully.

Regional Landscape

• Various businesses are likely to help North America dominate the global market.

North America dominated the cloud-based payroll software market in 2021. Various businesses have impacted the region's long-term market expansion with significant staff bases. With 2.2 million employees, according to a recent survey, Walmart in the USA has the most extensive employee base globally, which has boosted the demand for cloud-based payroll software to keep track of the workforce. Growing payroll startups will create opportunities for market growth.

Competitive Landscape 

Key players within the global Cloud Based Payroll Software market include 

• Abbott Laboratories 
• Sage Group 
• Oracle Corporation 
• Paycom Software Inc. 
• FinancialForceSoftware 
• Ascentis H.R. Software 
• IRIS Software Group Ltd. 
• Kronos Incorporated 
• Zenefits Software 
• Ceridian HCM Inc. 
• ADP 
• SAP SE 

Global cloud based payroll software market is segmented as follows:

By Product Type

• Free & Open-source Software
• Subscription-based Software

By Organization Size

• Small & Medium-Sized Enterprises
• Large Enterprises

By Application 

• Government
• I.T. Sector
• Defense
• BFSI (Banking, Financial Services, and Insurance)
• Education
• Others

By Region

• North America
  • The U.S.
  • Canada
  • Mexico
• Europe
  • France
  • The UK
  • Spain
  • Germany
  • Italy
  • Nordic Countries
    • Denmark
    • Sweden
    • Norway
  • Benelux Union
    • Belgium
    • The Netherlands
    • Luxembourg
  • Rest of Europe
• Asia Pacific
  • China
  • Japan
  • India
  • Australia
  • South Korea
  • Southeast Asia
    • Indonesia
    • Thailand
    • Malaysia
    • Singapore
    • Rest of Southeast Asia
  • Rest of Asia Pacific
• The Middle East & Africa
  • Saudi Arabia
  • UAE
  • Egypt
  • South Africa
  • Rest of the Middle East & Africa
• Latin America
  • Brazil
  • Argentina
  • Rest of Latin America