Maybe, but the per-user price on your IT invoice will not tell you on its own. MSP pricing guides that rank for this question put small business managed IT at roughly $100 to $250 per user per month, and Cortavo's guide uses exactly that range. If you pay inside it, the rate is probably not your problem. The overcharge, when there is one, usually sits in the lines around the rate: seats for people who left, Microsoft licences billed above list price, routine work billed as projects, and a contract that rolls over before anyone reads it.
This guide is for the owner buying the IT support, not the MSP selling it. It gives you a way to price your own bill in one number, then seven checks you can run with the invoice, your staff list and a Microsoft 365 admin login. If you want the wider picture of where money quietly leaves a small business, start with our map of where small businesses lose money; this post goes deep on one line of it.
What does a fair per-user price actually buy?
A fair price is one where you know exactly what is and is not included. The spread in published pricing is wide because the products are different, not because half the market is lying.
Here is what the MSPs themselves publish, all fetched on 2026-09-28:
| Source (all are MSPs selling the service) | Published range | What moves it |
|---|---|---|
| VC3's pricing guide | $150 a month to $400 per user; per device $50 to $100 per workstation, $100 to $400 per server | Monitoring only sits at the bottom, fully hosted systems at the top; hourly work $175 to $350 |
| Velo IT Group | $70 to $400 per user | Security operations, compliance, hardware bundled in |
| Corsica Technologies | $100 to $400 per user | Complexity and bundled cybersecurity |
| r/msp owner, offices under 25 people | $200 per employee all-inclusive | "Labor or many things billed separately" at lower rates |
The r/msp figure comes from an MSP owner answering a small business that asked for managed IT that doesn't cost an arm and a leg. The same owner added the line every buyer should remember: "There are people that will bring lower rates, that is usually labor or many things billed separately."
That is the pattern to look for. One Phoenix MSP owner laid out his own tiers on r/msp in 2021, and they show how three "per endpoint" prices can be three different products:
- $40 per endpoint: security tools only, every hour of labour billed at $110.
- $60 per endpoint: tools plus unlimited remote support, onsite billed hourly.
- $75 per endpoint: everything, including onsite.
He also defined a "project" as anything "taking 5 or more hours, affecting 5 or more endpoints/users," billed on top. So a $40 plan can cost more than a $75 plan in a month where three laptops die. Velo's guide says the same from the seller's side: "If a provider quotes you below $100 per user for a full program, ask specifically what is excluded."
Work out your effective per-user cost
Your real per-user price is total IT spend divided by the people who actually work for you. In a busy month, the quoted rate can be the smaller part of the bill.
Add up twelve months of:
- The monthly managed services fee.
- Microsoft 365 or Google Workspace licences, if the IT company bills them.
- Security, backup and other tool add-ons listed separately.
- Project and hourly invoices.
- Any onboarding fee, spread over the contract length.
Divide by twelve, then by your current headcount. That is the number to compare against the ranges above.
The r/msp thread that surfaced this topic shows why it matters. An MSP owner wrote that a client of about a decade, on a flat $1,800 a month, had grown from 20 users to 45. The client left for a provider charging "$140/mo per user with a 10k onboarding fee and 1yr agreement," which the owner said offered 9-to-5 support only. Run the numbers:
| Old provider (flat) | New provider (per user) | |
|---|---|---|
| Monthly fee at 45 users | $1,800 | $6,300 |
| Effective per user per month | $40 | $140 |
| Onboarding | none | $10,000 |
| First-year total | $21,600 | $85,600 |
| Support hours | After-hours included, per the owner | Business hours only, per the owner |
We only have the MSP's side of that story, and the top reply (269 points) said the old provider should have been "billing at a minimum 4-5x that per head." Both can be true: the client was probably underpaying, and the move still roughly quadrupled year-one IT spend. The point for you is that neither the $40 nor the $140 told the client what the year would cost. The effective number did.
Not sure what your IT bill really costs per person? Send us twelve months of IT invoices and your Microsoft 365 licence export. We come back with your effective per-user cost, the seats and licences you are paying for without using, and the renewal date to act before.
7 checks you can run on your own IT bill
Run these in order. The first three need nothing more than the invoice and a Microsoft 365 admin login, and they are where most of the recoverable money sits.
1. Are you paying for people who left?
Count the seats on the invoice, then count the people on payroll. If the invoice says 32 users and you employ 27, ask why.
Microsoft's own instructions for deleting a user are blunt: "Although you deleted the user's account, you're still paying for the license." The licence is not reassigned automatically. So a former employee can keep costing you twice: once in the Microsoft licence, and again in the MSP's per-user fee if they bill from the same count.
Two fixes Microsoft documents on the same page. A departed employee's mailbox can become a shared mailbox, and "a shared mailbox doesn't require a license." And if someone still needs to read that mail, you can convert it rather than keep paying for a full seat.
2. Are your licences priced above Microsoft's list?
Compare each licence line to Microsoft's own price. At the time of writing, Microsoft lists these per user per month on an annual plan:
| Plan | Annual plan | Monthly plan |
|---|---|---|
| Microsoft 365 Business Basic | $7.00 | check your plan |
| Microsoft 365 Business Standard | $14.00 | $16.80 |
| Microsoft 365 Business Premium | $22.00 | $26.40 |
Some markup is normal: resellers carry the billing and the support. One MSP owner on r/msp said in 2021, "We resell 365 with about 16% margin." Another MSP, Uprite, writes that Microsoft licences "are almost always billed to you at cost or close to it." If your Business Premium line is well above $26.40, you are paying more than Microsoft's own monthly price, and it is fair to ask what for.
Also check the plan itself. Paying for Premium for someone who only needs email may be an easy saving, but ask first: some IT companies rely on Premium's security features being on every account.
3. Are you locked into an annual licence term?
Ask which term your Microsoft licences are on before you plan to cut seats. Under Microsoft's new commerce cancellation policy, a partner who wants to "reduce or change the number of licenses of the purchased subscription" must do it "within the seven-day window."
In plain terms: on an annual term, the seat count is set for the year. If you drop from 30 to 24 staff in March, you may pay for 30 until renewal. A monthly term lets you drop seats, but Microsoft's prices above show the cost: $26.40 against $22.00 for Business Premium, exactly 20% more. Neither is wrong. The leak is not knowing which one you have, and missing the seven days after renewal when you could have cut.
4. What gets billed as a project?
Get the written definition of in-scope and out-of-scope work. Corsica, an MSP, says it outright in its own pricing guide: "MSPs make their real money from out of scope charges." New starter setups, office moves, a new printer, a migration, a 2 a.m. outage: all of these are billable on some plans and included on others.
Pull twelve months of project and hourly invoices and sort them. If routine work like setting up a new hire's laptop keeps showing up as a separate charge, either the plan is the wrong tier or the scope is being read in the provider's favour.
5. Does any hardware stop working without a subscription?
Ask which devices need a paid licence to keep running. Some business networking gear is sold with a mandatory cloud licence. Cisco Meraki's licensing documentation says that for organisations without valid licensing "for greater than 30 days, all Cisco Meraki devices will be shutdown."
That is not a scam, and plenty of IT pros prefer the support that comes with it. But it is a recurring cost that belongs in your effective per-user number. In an r/it thread where an owner posted a quote with the title I know nothing about IT (269 comments), one reply summed up the buyer's option: "Ask for a quote on a system that doesn't have ongoing costs." Another: "Maybe underpaying on labor and definitely overpaying on equipment."
6. When does the contract renew, and how do you leave?
Find the renewal date, the notice period and any exit fee, and put them in the calendar. Most managed services agreements renew automatically for another term unless you give notice inside a window. Miss it and you have lost your leverage for a year. This is the same trap as any auto-renewing subscription, the kind we walk through for cancelling a QuickBooks subscription and for price increases at renewal.
Also read the offboarding clause. One r/msp post sharing an MSP's offboarding policy lists what the client owns (hardware, data, admin access, documentation) and says backup data is kept "for 6 months, then deleted." Know your version before you need it, and price the exit the way you would before switching a CRM: onboarding at the new provider is a real cost.
7. Do you own your own admin accounts?
You should hold a working global admin login for Microsoft 365, the domain registrar and the firewall. If only the IT company has them, switching providers turns into a negotiation. The same rule applies to agencies, and the steps to take back your website and Google accounts carry over almost line for line. Test the login yourself; do not accept "it's in the documentation."
Tip
The 20-minute version. Open the last IT invoice and your Microsoft 365 admin centre side by side. Write down three numbers: users billed by the IT company, licences assigned in Microsoft, and people on payroll today. If those three numbers are not the same, you have found your first saving.
Watch out for fear numbers in the sales pitch
Treat any downtime statistic without a link as a sales line, not a fact. Pricing pages and sales videos for managed IT lean on scary figures, and they do not agree with each other.
Velo's guide refers to "the $5,600-per-minute downtime figure that auditors and insurers use." A 7tech sales video aimed at small businesses says "average downtime costs a small business $5,600 per hour, according to Gartner," and adds that "60% of small businesses that suffer major downtime don't fully recover," with no source on screen. The same $5,600 cannot be both a per-minute figure and a small business per-hour figure. Neither page links the original.
Downtime is a real cost, and a good provider is worth paying for. But price your own risk from your own numbers: what an hour offline costs you in payroll and lost jobs, and how often it has actually happened. That is a better basis for comparing a $90 plan and a $190 plan than a borrowed statistic.
When cheap is the real problem
If your effective cost is well under $100 per user for "everything," check what is not being done. The r/msp reaction to the $40-per-user flat client was near-unanimous. "$40 a user per month? WTF," read one reply, and another said the provider's "margin has to be 0%."
A provider losing money on your account tends to skip the unglamorous work: patching, backup tests, documentation, security reviews. You only find out when something breaks. So an audit can end with the conclusion that you should pay more, for a written scope you can hold them to. The goal is paying for what you get, not paying the least. If you are weighing whether to bring any of this in-house instead, our test for office help versus software applies here too.
A 10-minute self-test
Answer yes or no. Two or more "no" answers mean the bill is worth a closer look.
- Does the number of users billed match your headcount today?
- Is every Microsoft 365 licence assigned to a current employee or a mailbox that needs one?
- Is each licence line at or near Microsoft's list price for your term?
- Do you know whether your licences are on an annual or monthly term?
- Do you have a written list of what the monthly fee includes, and what counts as a project?
- Do you know the contract renewal date and notice period?
- Can you log in as a global admin to Microsoft 365 and your domain registrar yourself?
- Is your effective per-user cost within the range your plan's features justify?
The same checks work on any vendor that bills per seat. Our guide to whether your marketing agency is ripping you off runs the equivalent test on the other big monthly retainer most owners never audit, and the same seat math explains why field service software costs so much.
Answered "no" to two or more? That usually means seats for people who left, licences on the wrong plan or term, or a renewal date nobody diarised. Send us the IT invoices, the contract and a licence export. You get a written list of what to cut, what to dispute and what to renegotiate before it renews.
Can you just do this yourself?
Yes, checks 1 to 3 take an afternoon for most offices under 30 people. Pull the Microsoft 365 active users and licences page, compare it to payroll and the invoice, and email the IT company a list of seats to remove and licences to downgrade at the next renewal window. Most providers will fix it without argument, because the discrepancy is usually neglect rather than intent.
It stops being worth your time when the contract is long, the invoices mix licences, tools and projects on one line, or you are comparing two quotes built on different scopes. That is where a line-by-line read pays off. And once the bill is clean, keep it clean: removing a leaver's licence belongs on the same offboarding checklist as collecting their laptop, the kind of routine step worth automating in a small business. If your provider is also the only one who knows where your data lives, read what happens to your data if software shuts down before you need to know.