IT Budget Builder

Pick each cost in your IT budget from a list by category and enter it as a monthly, annual or one-time amount to get your monthly recurring run rate, your one-time total, the split by category and what next year's increases add, with a budget sheet you can download.

1. Your budget lines

2. Get the report

We’ll email your budget: the monthly figure (recurring costs ÷ 12), the one-time total and the year’s total, each category’s amount and share, and next year’s recurring costs, with a private link to the report and a budget sheet to download.

Enter the amount for at least one budget line to build your budget.

Related Tools

IT Renewal Calendar
See every contract renewal and notice deadline on one calendar, with what your spend will look like over the next three years.
IT Budget Benchmark
See your IT spend as a share of revenue and per employee, and how it compares with published industry benchmarks.
Hardware Refresh Budget Calculator
Plan what replacing laptops, servers, network gear and phones on schedule costs each year, and how leasing them as a service compares.
Price Escalator Calculator
See what an annual price increase clause costs you over a contract term, compared with a flat price.

How the calculation works

Each line is one cost: a category, an item from that category’s list (Other if it isn’t listed), an amount and whether it’s billed monthly, annually or once in the budget year. Recurring lines can also take the increase you expect next year. The calculator works in US dollars and doesn’t apply any rates or benchmarks of its own: every figure comes from the lines you enter.

Budget-year amount: a monthly line × 12; an annual or one-time line as entered.
Per month: the recurring lines’ budget-year amounts ÷ 12, your monthly run rate. One-time costs are never in it. An annual line is spread evenly over the months, so it isn’t what you will be invoiced in a given month.
One-time total: the sum of the one-time lines, shown on its own and not in the monthly figure.
Annual budget: the recurring and one-time costs together.
Recurring and one-time split: each total ÷ the annual budget.
Categories: each category’s budget-year amount and its share of the annual budget, largest first. A category with both kinds of line shows how much of it is one-time.
Next year’s recurring costs: each recurring line’s budget-year amount × (1 + its increase); a line with no increase is carried flat. The change compares next year’s recurring costs with this year’s. One-time costs are left out of both sides, because they don’t carry over. This appears only when at least one line has an increase.

The report rounds to whole dollars and shares to one decimal, so the shares may not add to exactly 100%. The budget sheet keeps cents.

The categories are connectivity, voice and UCaaS, cloud, SaaS, security, hardware refresh, MSP and IT staff, projects and other, and each has a short list of common items, such as internet, MPLS/SD-WAN and wireless backup under connectivity. Use the closest one, or Other: the split is for your own planning, and the calculator doesn’t compare it with anything.

Worked example

A company’s budget lines for the year:

Line	Category	Item	Amount	Increase next year
1	Connectivity	Internet	$2,400 a month	3%
2	Voice and UCaaS	UCaaS phone system	$1,500 a month	none
3	Cloud	IaaS and hosting	$4,000 a month	10%
4	SaaS	Productivity suite	$36,000 a year	5%
5	Security	MDR and SOC	$24,000 a year	8%
6	MSP and IT staff	Managed services	$6,000 a month	4%
7	Hardware refresh	Laptops and desktops	$30,000 one-time
8	Projects	Migration	$15,000 one-time

Budget-year amounts: $28,800 (2,400 × 12), $18,000, $48,000, $36,000, $24,000, $72,000, $30,000 and $15,000.

Recurring: $28,800 + $18,000 + $48,000 + $36,000 + $24,000 + $72,000 = $226,800 (83.4% of the budget)
Per month: $226,800 ÷ 12 = $18,900 a month in recurring costs
One-time total: $30,000 + $15,000 = $45,000 (16.6%), not in the monthly figure
Annual budget: $226,800 + $45,000 = $271,800

By category, largest first: MSP and IT staff $72,000 (26.5%), Cloud $48,000 (17.7%), SaaS $36,000 (13.2%), Hardware refresh $30,000 (11%, one-time), Connectivity $28,800 (10.6%), Security $24,000 (8.8%), Voice and UCaaS $18,000 (6.6%), Projects $15,000 (5.5%, one-time).

Next year’s recurring costs: $28,800 × 1.03 = $29,664; $18,000 flat; $48,000 × 1.10 = $52,800; $36,000 × 1.05 = $37,800; $24,000 × 1.08 = $25,920; $72,000 × 1.04 = $74,880. Together $239,064, up $12,264 (5.4%) from $226,800. The cloud line (IaaS and hosting) moves the most, up $4,800.

Reading the report

The monthly figure and the one-time total. The monthly figure is what the budget costs a month to keep running, recurring costs only, so it’s the starting point for next year. One-time costs are a separate total for the year: plan when each falls due. For cash timing, also check when each annual line is invoiced.
The largest category. It’s where a review of contracts and usage has the most money to work with. It isn’t a sign the category is too large: the right split depends on the business.
Next year’s change. It shows what the increases you entered add before any new projects. Each line’s increase comes from you, so it’s only as good as the contracts and plans behind it.

Building the budget from your contracts

Most recurring lines are contracts. The IT renewal calendar lists them with their renewal dates, notice deadlines and escalators, which tells you which lines may change next year and by how much. The price escalator calculator shows what an annual increase adds over a contract term, and the hardware refresh budget calculator turns device counts and replacement cycles into a yearly hardware line.

To see how your total compares with published figures for IT spend as a share of revenue, use the IT budget benchmark.

Frequently Asked Questions

What should go in an IT budget?

Every recurring cost you expect to pay in the budget year, plus the one-time costs you plan for it. Recurring costs usually include internet and network circuits, phones and UCaaS, cloud, SaaS subscriptions, security tools and services, managed services and IT staff. One-time costs include hardware purchases and refreshes, project fees and setup charges. Your invoices and your contract list are the best starting points.

How do I enter a cost that's billed per user or per seat?

Multiply it out and enter the total: 120 seats at $12 a month is $1,440 a month. If the seat count will grow next year, put that growth into the line's increase along with any price increase. Several costs in one category can also share a line, so you can enter a category's total under Other if you don't have the detail.

Why are one-time costs left out of the monthly figure and next year?

The monthly figure is your run rate: recurring costs for the year ÷ 12, what IT costs a month to keep running. One-time costs such as a hardware refresh or a project are paid once, so they're shown as a separate one-time total and a big purchase doesn't inflate the monthly number; the annual budget is the two together. For the same reason they aren't part of next year's starting point: next year's figure covers the recurring lines only, each at its amount plus the increase you entered, or flat if you left it blank.

Where should next year's increase come from?

From your contracts and plans, not a general rate. Check each contract for a price escalator clause and when it renews, since a renewal can reset the price. Add planned growth in users, seats or cloud usage. Enter a negative increase for a cost you expect to fall, such as a service you will cancel or a contract you have renegotiated.

How much should a company spend on IT?

This builder adds up your own costs and doesn't compare them with anyone else's. To compare your total with published figures for IT spend as a share of revenue, use the IT Budget Benchmark, which shows each source, what it measures and its date.

What's in the budget sheet?

A CSV file that opens in Excel, Google Sheets or Numbers. It lists every line with its category, item, billing, amount, budget-year amount, monthly figure (recurring lines only), increase and next year's amount, with an empty Notes column to fill in, then the category totals and the budget totals. The download is on the private report page that the email links to.

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IT Budget Builder

1. Your budget lines

Budget lines

2. Get the report

Check your inbox

2. Your report

What stands out

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How the calculation works

Worked example

Reading the report

Building the budget from your contracts

Frequently Asked Questions

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