How the calculation works

In-house, per year:

  • Loaded cost per person = salary × (1 + benefits % ÷ 100) + training per person.
  • Staff cost = IT staff × loaded cost per person.
  • Recruiting = IT staff × turnover % ÷ 100 × recruiting cost per hire.
  • In-house total = staff cost + recruiting + tools and software + the cost of covering the gaps.

Coverage uses the help desk staffing calculator’s math for one seat on a 40-hour week:

  • Hours to cover a year = hours per day × days per week × 365 ÷ 7.
  • Productive hours per person = 40 × 52 − days off × 8.
  • People for one person on duty at all times = hours to cover ÷ productive hours.
  • Hours with nobody on duty = hours to cover − IT staff × productive hours (zero if negative). This assumes the team’s time is spread perfectly across the schedule, so the real gap is at least this large. The calculator doesn’t price these hours; enter what you spend, or would spend, to cover them.

MSP, per year:

  • MSP fees = users (or devices) × price a month × 12.
  • Onboarding = one-time fee ÷ contract months × 12, so the fee is spread over the term.
  • Staff kept in-house = people kept × the same loaded cost per person.
  • MSP total = fees + onboarding + staff kept + other MSP costs.

Comparison: the difference is in-house total − MSP total. Cost per user a month is each total ÷ users ÷ 12. The break-even MSP price = (in-house total − onboarding − staff kept − other MSP costs) ÷ users (or devices) ÷ 12.

Assumptions: one steady-state year at today’s prices, with no raises, price escalators or inflation. Staff kept alongside the MSP are costed at the same loaded cost but without recruiting or turnover costs; add those to other MSP costs if you expect them. Every number is yours; the calculator has no built-in salaries, benefit rates or MSP prices. It compares cost only: the scope of the MSP agreement (what the per-seat price includes, response times, on-site visits, projects) decides whether the two sides are like for like.

Worked example

A company with 60 users has one IT person at $85,000 a year, with benefits and payroll taxes of 30% and $2,000 of training. The team pays $12,000 a year for tools, recruiting costs $15,000 a hire with 20% turnover, and the company spends $5,000 a year on after-hours help. Support is needed 8×5 with 40 days off a year. The MSP quotes $150 per user a month, a $3,600 onboarding fee on a 36-month term, and about $4,000 a year of projects outside the per-user price.

  • Loaded cost: $85,000 × 1.30 + $2,000 = $112,500.
  • Recruiting: 1 × 20% × $15,000 = $3,000 a year.
  • In-house total: $112,500 + $3,000 + $12,000 + $5,000 = $132,500 a year, $184.03 per user a month.
  • Coverage: 8×5 is 2,086 hours a year; one person has 1,760 productive hours, so the schedule needs 1.19 people and about 326 hours a year have nobody on duty.
  • MSP: 60 × $150 × 12 = $108,000, plus $3,600 ÷ 36 × 12 = $1,200 of onboarding and $4,000 of projects: $113,200 a year, $157.22 per user a month.
  • Difference: the MSP costs $19,300 a year less (14.6%).
  • Break-even: ($132,500 − $1,200 − $4,000) ÷ 60 ÷ 12 = $176.81 per user a month. A quote above that would cost more than the in-house team.

Comparing quotes fairly

MSP quotes differ most in what the per-user or per-device price leaves out: on-site visits, projects, after-hours work, security tools and hardware procurement are often extra. Put those in other MSP costs so every quote is compared on the same scope, and check the term, the price escalator and the notice period before you sign; the IT TCO calculator compares options over several years, and the contract renewal calculator works out the notice deadline.