Updated 10/14/2026
You want to do your own payroll? Give it a shot! For some small businesses, it's a great option... but for many, doing their own payroll presents some issues.
At CSI Accounting & Payroll, we’ve worked with thousands of small business owners over the past 60 years, and we've seen what happens when you don't hire a professional to handle your payroll.
Let's talk about the top three issues with the DIY approach:
You might use payroll software in the hopes that it will guide you and ensure accuracy. However, problems arise when you don’t know how to properly use the software. Payroll is something that seems simple... until it isn't.
Not getting any error messages when you input your payroll data? That doesn't mean you're doing things correctly. If you don't know your stuff, payroll mistakes lead to penalties and interest.
And if you do get an error message, will you know how to troubleshoot it without waiting in a long phone queue for customer service? At the end of the day, issues will largely fall on your shoulders.
Most people who do their own payroll think they're saving money. However, it still has an associated cost. In fact, it can cost more to do your payroll in-house than the cost of a payroll service.
Here's how.
Payroll software misuse results in these common mistakes:
If these mistakes occur, you may find yourself facing letters from the IRS.
Payroll software is no longer a one-time fee. It's now subscription-based, meaning you keep paying for the same thing over and over. Every year you’re paying for a “newer” version of the software with a bunch of “new” features that don’t really feel all that different.
Smaller businesses can't employ their own Payroll Specialist in-house due to the associated costs, including but not limited to:
Maybe you handle your payroll on the side, or you ask one of your employees to do it. Then you have to consider the cost of your time. Let's dive into this more in our next point.
Payroll always takes some time. Even if you use a payroll service, you'll need to collect and report the correct information to them.
For businesses with only a couple of employees, it might be worth the time to do your own payroll. However, for some small businesses, it can add up to many additional hours of work, especially if they run into errors. If you came up with even one idea to grow or improve your business instead of doing payroll, hiring a payroll service pays off!
But let's strictly talk numbers.
How many hours can go into running payroll before it's not worth it to DIY anymore? Be sure you know what your time is worth, and follow this formula:
Owner's high-value time * Number of hours spent on payroll > Fee of a payroll service
If this formula is true, you're losing money by not outsourcing.
When you handle so many things as the owner of a small business, payroll seems like just another small task. For some people, this can absolutely be done in-house!
However, for other people, factoring in the difficulties of using the software, the fees and penalties that can occur, and the extra time required leaves them feeling defeated. At that point, it's time to consider using a payroll service.
At CSI Accounting & Payroll, we offer iSolved for your payroll and HCM needs. We handle quarterly and year-end local, state and federal tax filings, new hire reporting, and more. We also guarantee payroll compliance and are there to answer any questions you might have. It’s what we do.
Let us take one thing off your plate this year so you can get back to doing what you love. To see if we can be a match, schedule a free call!
Want to learn more about our payroll service? Read about how we determine our payroll pricing.