The honest range
When owners ask me what IT should cost, they usually expect a dodge. Here is the straight version, as annual figures per employee, hedged as ranges because businesses differ.
A typical office or professional-services business — desks, laptops, cloud apps — lands between 1,200 and 3,000 dollars per employee per year once everything is counted honestly. A business with light computer use, like a shop where most staff share one terminal, can run 500 to 1,200 per employee. A business handling regulated or sensitive data — legal, medical, financial, government contracting — should expect 2,500 to 5,000, because security and compliance obligations are real costs, not add-ons.
If your current number is far below these ranges, you are usually not saving money; you are deferring a cost that will arrive on its own schedule, as an outage or an incident.
What the money buys
The per-employee number breaks into four buckets.
- Devices: a 1,000 to 1,500 dollar laptop on a three-to-four-year replacement cycle works out to 300 to 500 a year, plus a monitor, dock, and headset amortized similarly.
- Licenses: email and office suite at 7 to 25 dollars a month, plus your line-of-business software, accounting, CRM, and storage. Commonly 400 to 900 a year per person.
- Security: endpoint protection, password manager, backup, email filtering, MFA tooling. Done properly, 150 to 500 a year per person.
- Support: whoever answers when things break — an IT firm on a monthly agreement typically charges 75 to 200 dollars per user per month for full coverage, or you pay hourly and in your own time instead. This is the biggest and most variable bucket.
Any quote or budget you look at should map onto these four. If a bucket is empty, the cost is hiding somewhere, usually in your own hours.
Where owners overspend
The overspending I see has a pattern: money goes where salespeople visit.
- Oversized hardware. Buying top-spec machines for roles that live in a browser. Mid-range laptops are excellent now; spend up only for genuinely heavy work like video, CAD, or development.
- Overlapping subscriptions. Three tools that all do storage, or a project platform nobody opens. Auditing licenses annually routinely recovers 10 to 20 percent of software spend.
- Server habits. Paying to maintain, power, and back up an office server whose whole job could be a 15-dollar-a-month cloud service.
- Premium bundles. Paying for enterprise tiers when the business tier covers every feature you actually use.
None of these purchases feel wasteful in the moment — each has a plausible story. The audit is what exposes them.
Where owners underspend
Underspending hides in quieter places, and it costs more than the overspending saves.
- Backups that are assumed rather than tested. The spend to do this right is small; the cost of learning your backup was broken is a business-ending number for some firms.
- Security basics skipped — no MFA, shared passwords, no endpoint protection — because nothing bad has happened yet. This is the single most common gap I find in DMV small businesses, and closing it costs a few hundred dollars a year per person at most.
- Ancient machines kept alive past year five. The repair bills, slowness, and staff time lost usually exceed the price of replacement — a slow laptop wasting 15 minutes a day costs far more in wages than the new one.
- No support relationship at all, which means every problem lands on the most technical employee, whose actual job silently pays for it.
Smoothing lumpy costs into a monthly number
The reason IT budgets feel unmanageable is lumpiness: nothing for months, then six laptops and a big repair bill in one quarter. The fix is to convert everything into a monthly per-person number and fund it steadily.
Take devices on a replacement cycle — if a laptop setup costs 1,400 and lasts four years, that is about 30 dollars a month. Add monthly license costs directly. Add security tooling. Add support, either the agreement price or an honest average of your hourly spend. For many small businesses, the total lands between 100 and 250 dollars per employee per month.
Budget that number every month into a plan or simply a reserve, replace hardware on schedule rather than at failure, and the emergency purchases mostly disappear — because most IT emergencies are just deferred maintenance arriving with interest.
Build your number this week
- Pull twelve months of actual spend — hardware, subscriptions, support invoices, that one emergency — and divide by headcount. Now you have your real number, not your assumed one.
- Sort it into the four buckets: devices, licenses, security, support. Note which bucket is starved.
- Cancel what the license audit exposes, and redirect that money to the starved bucket, which is usually security or backups.
- Set a replacement cycle — three to four years for laptops — and calendar it, so hardware is a schedule, not a surprise.
- Convert the total to a monthly per-employee figure and judge every future quote against it.
If you want a second opinion on the number, a spend review against these benchmarks is a short exercise — we do them at HashWhales for businesses around DC, Maryland, and Northern Virginia, and the audit usually pays for itself in cancelled subscriptions alone.