At some point, every growing business faces this question: should we bring the back-office functions in-house — hire our own bookkeeper, payroll officer, IT support person, and HR generalist — or continue outsourcing? The answer is almost always mathematical. But most business owners only look at half the equation, comparing the monthly outsourcing fee against a salary, rather than comparing the total cost of each model.
This guide does the full comparison — every cost, visible and hidden, for both approaches.
To replicate what an integrated outsourced back-office provides — bookkeeping, BAS, financial reporting, managed payroll, Award compliance, HR support, IT management, and cybersecurity — you'd need to hire the following team:
Bookkeeper / Finance Manager: Handles day-to-day bookkeeping, bank reconciliation, BAS preparation, accounts payable and receivable, and financial reporting. Salary range: $65,000–85,000 for an experienced full-time bookkeeper; $85,000–110,000 for a finance manager with reporting and advisory capability.
Payroll Officer: Processes pay runs, manages Award interpretation, handles super submissions, lodges STP, and responds to employee payroll queries. Salary range: $60,000–75,000 for a competent payroll officer with Award experience; $75,000–95,000 for a senior payroll specialist who can handle complex multi-Award environments.
IT Support Person: Manages your network, devices, software, backups, cybersecurity, and day-to-day user support. Salary range: $70,000–90,000 for a generalist IT support technician; $90,000–120,000 for a systems administrator with cybersecurity competence.
HR Generalist (Part-Time or Shared): Manages employment contracts, onboarding, compliance policies, performance management guidance, and termination processes. Salary range: $30,000–50,000 for a part-time or fractional HR generalist (2–3 days per week); $75,000–95,000 for a full-time HR manager.
Total base salaries: $225,000–300,000 per year for the minimum viable team (using the experienced-but-not-senior tier for each role).
Base salary is only part of the employment cost. Add:
Total employer on-costs: $82,900–173,800/year
Total fully-loaded in-house cost: $307,900–473,800 per year
For a business with 15–25 employees, that's $12,300–31,600 per employee per year in back-office overhead.
An integrated outsourced back-office service — bookkeeping, BAS, financial reporting, managed payroll, Award compliance, HR support, IT management, and cybersecurity — for a 15–25 employee business typically costs $4,000–7,000 per month.
Total annual cost: $48,000–84,000 per year
That's $1,920–5,600 per employee per year. The outsourced model includes: a dedicated team (not one person) covering all functions, no leave coverage issues (the team manages coverage internally), software licences typically included in the fee, no recruitment costs (provider manages their own staffing), compliance updates and legislative changes managed proactively, and scalability without recruitment delays.
| Cost Element | In-House | Outsourced |
|---|---|---|
| Base cost | $225,000–300,000 | $48,000–84,000 |
| Employer on-costs | $82,900–173,800 | Included |
| Software | $15,000–43,200 | Included |
| Recruitment (amortised) | $8,000–18,000 | Included |
| Leave coverage | $3,000–8,000 | Included |
| Total | $307,900–473,800 | $48,000–84,000 |
The outsourced model costs 70–82% less than the in-house model for the same scope of service. Even at the high end of outsourced pricing against the low end of in-house, the saving is $223,900 per year.
The cost advantage of outsourcing is compelling, but it's not the whole story. The outsourced model also provides structural advantages:
Team depth: If your in-house bookkeeper resigns, you have a recruitment problem that takes 4–8 weeks to resolve. If one team member at your outsourced provider leaves, the service continues without interruption because the provider manages coverage.
Specialisation: An outsourced back-office provider employs specialists in each function — Award interpretation experts, cybersecurity analysts, financial reporting professionals. An in-house team of four generalists can't match this depth.
Scalability: Adding 10 employees to your business requires no change to your outsourced back-office fee (or a modest increase). Adding 10 employees with an in-house team might require hiring an additional staff member — a step-function cost increase with recruitment lead time.
In-house back-office makes sense in specific circumstances: when your business exceeds approximately 80–100 employees (the volume and complexity justify dedicated staff), when your operations are highly specialised and require deep institutional knowledge that's difficult to transfer (e.g., complex manufacturing cost accounting), when you have complex intercompany structures that benefit from a full-time financial controller, or when regulatory requirements in your industry mandate in-house compliance functions.
Below these thresholds, outsourcing is almost always more cost-effective, more resilient, and provides better coverage.
Some businesses adopt a hybrid model: a light internal finance function — typically a part-time office manager or administrator who serves as the internal point of contact — combined with outsourced specialist services for bookkeeping, payroll, IT, and compliance. This gives you an internal person who knows your business and can handle basic administration, while the complex, compliance-sensitive work is handled by specialists.
The hybrid model typically costs $30,000–50,000 for the internal person plus $48,000–84,000 for the outsourced service — a total of $78,000–134,000, still well below the full in-house model.
The recruitment reality. Finding and retaining quality in-house back-office staff is increasingly difficult. Experienced bookkeepers with BAS agent registration, payroll specialists with genuine Award interpretation expertise, and IT professionals with cybersecurity skills are in high demand across Australia. Average time-to-fill for these roles is 6–10 weeks, during which the function goes unmanaged or falls back on the business owner. Turnover in these roles averages 2–3 years, meaning you face recruitment cycles regularly. An outsourced provider manages their own staffing, and service continuity is their problem, not yours — eliminating the most disruptive aspect of in-house back-office management.
Every business is different. Use our Business Cost Diagnostic to calculate your specific true cost — including the hidden costs most businesses don't track.
Then book a free comparison review with Valont to see what an integrated back-office service would cost for your exact situation.