And why the payroll industry’s pricing looks a lot like the Eskom mop scandal
South Africans still joke about the infamous R238,000 Eskom mop - a symbol of outrageous markups and broken procurement systems. The public was rightly furious. How could something that costs under R150 be sold for hundreds of thousands of rand?
But here’s the uncomfortable part: If you think that markup is bad, wait until you see the payroll industry. Let’s talk about direct costs - not marketing, not salaries, not office plants. Just the raw computational cost of generating a payslip.
At openHR, even if our servers run at only 10% capacity, the cost to generate a single payslip is: R0.00024 (Yes, that’s three zeros after the decimal.)
Now compare that to what a major competitor effectively charges per payslip once you break down their subscription fees: R40 per payslip
Let’s put those numbers next to each other:
Comparing apples with apples
Suddenly, the R238,000 Eskom mop looks like a bargain.
Why isn’t this called corruption?
When Eskom overpaid for a mop, the country erupted. When payroll companies overcharge SMEs by millions of percent, the industry calls it “standard pricing.” The usual defence is predictable:
“Payroll software requires highly skilled staff.”
Sure. But so does manufacturing industrial cleaning equipment, running logistics, or supplying specialised tools. Why can’t the Eskom vendor use the same excuse? Because we instinctively recognise that a R238,000 mop is absurd - no matter how many engineers, accountants, or procurement officers stand behind it. So why don’t we apply the same logic to payroll?
The truth is simple:
Payroll is computationally cheap. Compliance is computationally cheap. The industry is expensive because it chooses to be. Legacy vendors aren’t charging for cost. They’re charging for the illusion that payroll must be expensive.
This is why openHR can afford to be free
Once you understand the real economics of payroll, openHR’s model stops looking generous and starts looking logical. We’re not absorbing massive losses. We’re not subsidising anything. We’re simply refusing to participate in a pricing methodology that punishes SMEs for being compliant.
openHR is free because payroll should be free - or at least nowhere near the 17‑million‑percent markups the industry has normalised.
When you strip away the legacy pricing, the fear, and the “that’s just how it’s always been,” you’re left with a simple truth:
Payroll doesn’t need to be expensive. It just needs to be honest.
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