Short answer: for a 500-employee company in India, payroll-only is not a real option. Buy an enterprise-grade HRMS. At this size the decision is which suite and how it integrates with finance and attendance across sites, not HRMS versus payroll. A full HRMS runs about ₹3.60 lakh to ₹9 lakh a year, roughly ₹3.9 lakh over what payroll-only would theoretically cost, and it is the lowest per-employee premium in the whole 50-to-500 range. Weigh uptime, data security, role-based access and clean ERP integration over module count.
A 500-person mid-market manufacturer with plants in two states and a corporate office in a third had already accepted they needed a proper HRMS. Their real worry was integration: could it talk to their ERP, would it hold up during a two-shift attendance rush, and who owned the data. Those are the right questions at 500. The HRMS-versus-payroll debate is over here. Payroll-only software cannot run a company this size, and no serious HR leader pretends otherwise.
At 500 the recommender confirms the obvious. Its value here is showing how low the per-head premium has fallen, and letting you frame the spend for your finance team.
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 category question is closed
Five hundred employees means payroll runs across multiple states, multiple registrations, multiple attendance setups and a salary base broad enough that every tax slab and surcharge tier is in play. No spreadsheet-and-payroll-tool arrangement survives that. The only debate is which HRMS, at what tier, with which integrations. Anyone still weighing payroll-only at 500 is asking a question that headcount answered a long time ago.
What replaces it is a harder set of questions about reliability. Can the system handle 500 people clocking in within the same fifteen-minute window. Does it stay up on payroll day. How fast does support respond when a filing deadline is hours away. Those operational answers matter more than any feature comparison.
What actually matters at 500
Four things decide it at this size. Uptime and performance under load, because downtime on payroll day is not survivable. Data security and access control, because 500 people’s salary and personal data is a serious liability if it leaks. Integration with your finance or ERP system, because manual export at this scale reintroduces the errors you bought the suite to remove. And implementation quality, because migrating 500 employees badly can break a payroll cycle.
Notice that none of those are modules. By 500 every credible HRMS has the modules. You are buying reliability, security and integration, and you should pay for them.
The cost math
Payroll-only at 500 employees would run about ₹1.5 lakh to ₹3.3 lakh a year, but it is a theoretical number since payroll-only cannot actually carry a company this size. A full HRMS lands around ₹3.6 lakh to ₹9 lakh. The gap is roughly ₹3.9 lakh a year at the midpoints, and per employee it is the lowest in the entire 50-to-500 range because volume pricing is deepest here.
The number worth obsessing over is not the software fee, it is the payroll itself. A structuring inefficiency spread across 500 salaries, a basic-pay ratio that inflates PF, a poorly set HRA component, costs multiples of the HRMS bill every year. Keep offers disciplined in the gross to CTC calculator, model increment budgets with the CTC hike calculator, and reverse-engineer packages from a target take-home with the reverse CTC calculator. For smaller teams, the 400-employee guide covers the tier-selection stage.