Short answer: for a 400-employee company in India, buy a full HRMS. The real question is which tier, not whether. Payroll-only cannot carry the compliance and integration load at this size, and manual reconciliation across a multi-state, 400-person payroll is an audit finding waiting to happen. Payroll-only runs about ₹1.44 lakh to ₹3.36 lakh a year; a full HRMS about ₹3.60 lakh to ₹8.64 lakh, an extra ₹3.72 lakh or so, with per-head rates still falling. Focus your evaluation on implementation quality, data migration and payroll-attendance integration.
By the time a logistics company hit 400 employees across a hub-and-spoke network, the founder was not asking whether to buy an HRMS. He was asking which one, and how badly a bad implementation could hurt. That is the right question at 400. Payroll-only software has been left behind two hundred people ago, and the decision is now about tiers, integrations and rollout risk.
At 400 the recommender does not really debate the category. Use it to sense-check that your configuration is genuinely HRMS-shaped, then focus your energy on the buying criteria that matter at this size.
greytHR runs payroll, payslips and full HR (attendance, leave, onboarding) plus PF, ESI, PT and TDS compliance for Indian teams, from small companies to 1,000+ employees.
The risk is statutory now
At 400 people the cost of getting payroll wrong is no longer an annoyed employee, it is a compliance exposure. PF and ESI filings, TDS across a large and varied salary base, professional tax in several states, and the labour registers each state expects. Reconciling all of that by hand across a 400-person payroll is how audit findings are born.
An integrated HRMS reduces that exposure by making the statutory data a byproduct of the workflow rather than a manual assembly job. Every joiner, exit and salary change flows through the same system, so the returns you file are built on the same records your managers approved. Payroll-only software cannot offer that because it never sees the workflow, only the final salary.
The buying criteria change
At 50 employees you compare feature lists. At 400 you compare implementations. The difference between two HRMS suites at this size is rarely the modules, they all have the modules. It is whether the vendor can migrate your existing data cleanly, integrate attendance hardware across sites, and get 400 people live without a broken payroll cycle in the middle.
A cheaper suite with a poor rollout costs more than a pricier one that lands clean. Weigh the implementation team, the migration plan and the payroll-attendance integration harder than the sticker price. This is the one place where spending up front genuinely pays back.
The cost math
Payroll-only at 400 employees runs about ₹1.44 lakh to ₹3.36 lakh a year, though at this size you are fighting its limits rather than its price. A full HRMS lands around ₹3.60 lakh to ₹8.64 lakh. The gap is roughly ₹3.72 lakh a year at the midpoints, and per employee it is lower than at any smaller size thanks to volume pricing.
The software line is not where a 400-person company should optimise. Compensation is. A structuring inefficiency multiplied across 400 salaries is a far bigger number than the HRMS fee. Keep offers disciplined in the gross to CTC calculator, model appraisal outflow with the CTC hike calculator, and optimise regime choice in the in-hand salary optimizer. Compare with the 300-employee and 500-employee guides.