Quick Answer
An in-house IT technician costs a UK business £35,000–£55,000/year in salary alone, plus £8,000–£15,000 in employer costs (NI, pension, training, tools). That is £43,000–£70,000/year for one person. Outsourced IT for a 30-person business costs approximately £16,200–£28,800/year (£45–£80/user/month) and gives you an entire team.
The break-even point is typically around 75–100 users — below that, outsourcing almost always wins on cost. Connection Technologies provides a full managed IT team from £45/user/month, which for 30 users is just £16,200/year.
Last updated: March 2026 | Reviewed by: Connection Technologies managed IT team
The Real Cost of In-House IT
Most businesses dramatically underestimate the true cost of maintaining an in-house IT team. The salary is just the starting point — employer costs, tools, training, recruitment and coverage gaps add 30–50% on top. Here is the full picture:
Salary Costs
UK IT salaries in 2026 vary significantly by role, experience and location:
| Role | Salary Range (UK) | London Premium |
|---|---|---|
| IT Support Technician (1st line) | £22,000–£30,000 | +15–20% |
| IT Support Engineer (2nd line) | £30,000–£42,000 | +15–20% |
| Senior IT Engineer (3rd line) | £40,000–£55,000 | +15–25% |
| IT Manager | £45,000–£65,000 | +20–30% |
| IT Director / Head of IT | £65,000–£100,000 | +20–30% |
| Security Specialist | £50,000–£75,000 | +20–30% |
| Network Engineer | £38,000–£55,000 | +15–25% |
Hidden Employer Costs
On top of salary, employers pay significant additional costs that are often forgotten when budgeting:
Employer National Insurance: 13.8% of salary above the threshold. For a £45,000 salary, that is approximately £5,200/year.
Pension contributions: Minimum 3% employer contribution under auto-enrolment, but competitive IT roles often require 5–8%. For a £45,000 salary at 5%, that is £2,250/year.
Training and certifications: IT professionals need ongoing training to stay current. Microsoft, Cisco, CompTIA and security certifications cost £2,000–£5,000/year per person. Without training, their skills become outdated within 2–3 years.
Tools and software licences: Remote management tools, monitoring software, security platforms, ticketing systems and diagnostic tools cost £3,000–£8,000/year for a small IT team.
Recruitment costs: Hiring an IT professional costs £5,000–£15,000 in agency fees, advertising and interview time. With the average IT employee staying 2–3 years, this is a recurring cost.
Holiday and sick cover: Your IT person gets 25+ days holiday plus bank holidays and sick leave. During those 30–40 days per year, who handles IT emergencies? Temporary cover costs £150–£250/day, or you simply go without support.
Full Cost Comparison Table
| Cost Element | In-House (1 engineer, 30 users) | Outsourced MSP (30 users) |
|---|---|---|
| Salary / monthly fee | £40,000/year | £16,200–£28,800/year (£45–£80/user) |
| Employer NI | £4,600 | Included |
| Pension (5%) | £2,000 | Included |
| Training & certs | £3,000 | Included |
| Tools & software | £5,000 | Included |
| Recruitment (amortised) | £3,000/year | N/A |
| Holiday/sick cover | £3,000 | Included (team-based) |
| Total annual cost | £60,600 | £16,200–£28,800 |
| Cost per user/month | £168 | £45–£80 |
| Hours of coverage | 37.5 hrs/week, 46 weeks/year | 24/7 monitoring, business hours helpdesk |
| Expertise breadth | 1 generalist | Team of 10–50 specialists |
| Security expertise | Limited (1 person) | Dedicated security team |
| Scalability | Hire another person (£40k+) | Add users at £45–£80/month each |
The numbers are stark: in-house IT for 30 users costs £168/user/month for one generalist working limited hours. Outsourced IT costs £45–£80/user/month for an entire team working around the clock. That is a 50–75% saving with better coverage and broader expertise.
Need help with this? Connection Technologies offers a free technology assessment for UK businesses. Book your free consultation or call 0330 440 4247.
Salary vs MSP Costs: Worked Examples
Example 1: 15-Person Accountancy Firm
In-house option: Part-time IT technician, 3 days/week at £25,000 pro-rata = £15,000/year + £4,000 employer costs = £19,000/year. Limited to 3 days/week, no security expertise, no cover during holidays.
Outsourced option: 15 users × £50/user/month = £9,000/year. Full team, 24/7 monitoring, security included, named account manager. Saving: £10,000/year with better service.
Example 2: 50-Person Professional Services Firm
In-house option: 1 IT manager (£50,000) + 1 technician (£32,000) + employer costs (£22,000) + tools (£6,000) = £110,000/year. Two people covering business hours only, limited security and cloud expertise.
Outsourced option: 50 users × £55/user/month = £33,000/year. Full team including security specialists, cloud architects and vCIO. Saving: £77,000/year with broader expertise.
Example 3: 120-Person Multi-Site Business
In-house option: IT manager (£55,000) + 2 engineers (£72,000) + security analyst (£50,000) + employer costs (£48,000) + tools (£12,000) = £237,000/year. Four people, still gaps in coverage and specialist knowledge.
Outsourced option: 120 users × £65/user/month = £93,600/year. Full team with 24/7 monitoring, dedicated account manager, compliance support. Saving: £143,400/year.
Hidden Costs of In-House IT
Beyond the direct costs calculated above, in-house IT carries several hidden costs that are difficult to quantify but very real:
Single point of failure. If your one IT person is sick, on holiday or leaves, you have no IT support. For a business that depends on technology, this is a significant operational risk.
Knowledge gaps. No single person can be expert in networking, security, cloud, Microsoft 365, backup, compliance AND helpdesk support. In-house IT inevitably has blind spots that create risk.
Recruitment disruption. When your IT person leaves (average tenure 2–3 years), you face 2–4 months of recruitment, onboarding and knowledge transfer. During this period, IT support quality drops significantly.
Opportunity cost. Your IT person spends time on routine tasks (password resets, printer issues, software installs) instead of strategic projects that drive business value. An MSP handles routine tasks efficiently, freeing strategic capacity.
Hidden Costs of Outsourcing IT
Outsourcing is not without its own costs and risks — here is an honest assessment:
Less direct control. You are relying on an external company to manage critical infrastructure. Mitigate this with clear SLAs, regular reporting and a named account manager who is accountable to you.
Project work charged separately. Most MSPs include day-to-day support in the monthly fee but charge separately for projects (office moves, major upgrades, new implementations). Budget £5,000–£15,000/year for project work on top of the monthly fee.
Potential for vendor lock-in. Some MSPs use proprietary tools that make switching difficult. Mitigate by ensuring you own your data, domain names and software licences, and that the contract includes a clear exit and handover process.
Relationship building takes time. A new MSP needs 2–3 months to fully understand your environment and deliver optimal service. The first quarter may involve more issues as the team learns your setup.
Break-Even Analysis
At what point does in-house IT become more cost-effective than outsourcing? Here is the calculation:
| Users | Outsourced Cost (£55/user/month) | In-House Cost (1 tech + costs) | Winner |
|---|---|---|---|
| 10 | £6,600/year | £50,000/year | Outsourced (saves £43,400) |
| 25 | £16,500/year | £50,000/year | Outsourced (saves £33,500) |
| 50 | £33,000/year | £95,000/year (2 staff) | Outsourced (saves £62,000) |
| 75 | £49,500/year | £95,000/year (2 staff) | Outsourced (saves £45,500) |
| 100 | £66,000/year | £140,000/year (3 staff) | Outsourced (saves £74,000) |
| 150 | £99,000/year | £190,000/year (4 staff) | Outsourced (saves £91,000) |
| 250 | £165,000/year | £280,000/year (6 staff) | Outsourced (saves £115,000) |
The data shows that outsourcing wins at every size up to 250 users when you account for the full cost of in-house IT. The break-even point only shifts in favour of in-house when you reach very large organisations (300+ users) with complex, bespoke requirements.
The Hybrid Model Option
For businesses with 50–250 staff, a hybrid model often delivers the best of both worlds:
In-house IT manager or director (£45,000–£65,000/year) who understands your business, manages vendor relationships, leads projects and provides strategic direction.
Outsourced MSP (£45–£80/user/month) handling day-to-day helpdesk, monitoring, security, backups and routine maintenance.
This gives you the strategic oversight and business knowledge of an in-house hire combined with the breadth of expertise, 24/7 coverage and scalability of an MSP. The in-house person focuses on high-value activities while the MSP handles the operational workload.
Connection Technologies works with many businesses in this hybrid model, collaborating closely with in-house IT managers to deliver seamless support.
Our Verdict
For UK businesses with fewer than 100 users, outsourcing IT is almost always the right choice on both cost and capability. You get a full team of specialists for less than the cost of one or two in-house generalists, with better coverage, broader expertise and more predictable costs.
For businesses with 100–250 users, the hybrid model (in-house IT manager + outsourced MSP) often delivers the best results.
For businesses with 250+ users, a larger in-house team may make sense — but even at this size, many organisations outsource specific functions (security, helpdesk, monitoring) to specialist providers.
Connection Technologies is usually best for SMEs and mid-market organisations with 10–250 staff who want a single accountable partner for IT support, business mobiles, VoIP and broadband — with a named UK-based account manager, transparent pricing and no long-term lock-in.
Frequently Asked Questions
Is it cheaper to outsource IT or hire in-house?
For businesses with fewer than 100 staff, outsourcing is 50–75% cheaper than hiring equivalent in-house expertise. A single IT technician costs £50,000–£70,000/year fully loaded; outsourced IT for 30 users costs £16,200–£28,800/year with a full team.
At what size should I hire an in-house IT person?
Consider hiring an in-house IT manager (not technician) when you reach 50–75 users, to provide strategic oversight alongside your outsourced MSP. A full in-house IT team rarely makes sense below 150–200 users.
What are the risks of outsourcing IT?
The main risks are: less direct control, potential vendor lock-in, and relationship building time. Mitigate these by choosing a provider with a named account manager, clear SLAs, transparent reporting and reasonable exit terms.
Can I outsource some IT functions and keep others in-house?
Yes. The hybrid model is increasingly popular: keep an in-house IT manager for strategy and vendor management, outsource helpdesk, monitoring, security and maintenance to an MSP. This gives you the best of both worlds.
How much does an in-house IT team cost?
A single IT technician costs £50,000–£70,000/year fully loaded (salary + NI + pension + training + tools). A small IT team of 3 people costs £150,000–£210,000/year. These figures exclude recruitment costs, holiday cover and management overhead.
What does outsourced IT cost per user?
Outsourced IT costs £40–£100 per user per month depending on the service level. Connection Technologies offers comprehensive managed IT from £45/user/month including helpdesk, monitoring, security, backups and a named account manager.
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