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When it comes to VoIP costs, you can expect to pay around $10 to $30 per user, per month for a hosted VoIP system that utilizes existing computer and mobile devices your business owns. For businesses on a tight budget, the cheapest VoIP phone services offer affordable solutions without compromising essential features.
In contrast, it can cost over $10,000 to fit an on-premise VoIP system for a small business, with all the additional hardware and equipment costs factored in.
If you look at our comparison table, you’ll notice that most VoIP services start from around $10-$30 per user, per month, but this doesn’t tell the full story, as we explain below. If you want to take a look at the best deals available for your exact needs right now, you can use our free custom VoIP pricing tool. It only takes 45 seconds. Or, read on for more information on typical VoIP costs and pricing factors.
Note: prices accurate as of August 2024
In this guide, we cover:
- How Much Does VoIP Cost? Quick Answers
- VoIP Costs At a Glance
- Hosted vs On-Premise VoIP Costs Compared
- How Expensive is Setting up a VoIP System?
- How Much Does VoIP Equipment Cost?
- Installation Costs: What You Should Know
- Hidden Costs of VoIP: What to Know
- An Example of How Much You’ll Pay for VoIP
- How We Test VoIP products
- Verdict: Buying the Right VoIP System
A hosted VoIP system will typically cost just $10 to $30 per user per month if you use free software to make calls instead of physical phones. If you need VoIP hardware, you can pick up a VoIP desk phone for around $80 and a VoIP headset for $40 from providers such as Yealink, Cisco, and Polycom, or indirectly via your VoIP provider, such as RingCentral or Ooma.
The price of VoIP systems varies drastically depending on the size of your business, the features you opt for, and the type of service you require.
To gauge costs at a glance, check out our summary below:
- Hosted VoIP services start at $10 per user, per month for the most basic systems
- VoIP Desk Phones start from around $50
- VoIP headsets cost anywhere between $15 to $350 per model
- Softphones don’t incur installation costs, but setup and installation for on-premise devices can cost around $50 per extension
- An on-premise VoIP system will cost around $14,500 for teams of 20
- High-speed internet services cost anywhere from $50 to $350 per month
Hosted vs On-Premise VoIP Costs Compared
To put it bluntly, VoIP costs can vary hugely, depending on the type of service you opt for. That’s because VoIP typically comes in two flavors: hosted, and on-premise (i.e. unhosted):
- Hosted VoIP: You pay the provider to host the VoIP service for you, and the provider handles the equipment and tech on its end.
- On-premise VoIP: Equipment is hosted locally at your businesses, and you are responsible for maintenance.
| Cost per user | Additional equipment | Maintenance support | |
|---|---|---|---|
| Hosted VoIP Costs | On-Premise VoIP Costs | ||
| Between $10 to $30 per month | Between $500 to $1,000 up front | ||
| Purchasing extra equipment is optional | Purchasing extra, specialized equipment is necessary | ||
| Your VoIP provider will provide you with maintenance support | Your in-house IT team will have to troubleshoot technical issues |
In 2024, most businesses opt for the hosted option. It’s considerably cheaper as there is no initial large outlay, and it also saves a lot of headaches when it comes to potential tech issues (in essence, it’s not your problem). Larger companies may opt to host the equipment themselves, should they wish for more autonomy over the system, and direct access.
Whether you are looking for hosted or on-site VoIP solutions, our free comparison tool will help you find the best VoIP provider for your business – all you have to do is answer a few questions about your business and you’ll be served a custom quote.
How Expensive Is Setting Up a VoIP System?
The VoIP costs you’ll incur during setup will largely depend on whether you opt for the more modern, hosted, cloud-based system, or an on-premise system with additional hardware.
Hosted VoIP costs
As we’ve mentioned, if you go for the hosted option for your VoIP, there aren’t really any setup costs to consider, outside of ensuring that your internet speed is up to scratch, and any compatible devices you wish to use.
Modern phone switchboards are not required to be physically placed in your office, and your provider can take care of all servers and connections, remotely. For hosted VoIP, you’re looking at a per-user, per-month fee. The cost of this will depend on the package you opt for, and the number of staff you want to sign up but you can expect to pay around $10 – $30 per user.
If you’re using a hosted VoIP system, you’ll probably want to pay for toll-free numbers. Toll-free numbers are business phone numbers that start with three digits, which your customers or clients can dial without incurring a fee on their end. Your VoIP provider is likely to give you some toll-free minutes within the plan you choose (most do in 2024), but it’s good to check exactly what you’re getting before you part ways with any cash.
Below are a collection of the top providers on the market, so you can see the full range of VoIP prices for yourself. All of these providers require no additional hardware to get you up and running.
| Price from The typical lowest starting price. The lowest price available for your business will depend on your needs. | Free Trial | Users | ||
|---|---|---|---|---|
| BEST FOR VALUE  |  |  |  |  |
| Zoom Phone | RingCentral | Vonage | GoTo Connect | Ooma |
| None | 15 days | 14 days | Free demo only | None |
| Limit of 1000 (Enterprise Plan) | Unlimited (discounts for 50+ users) | Unlimited | Unlimited | Unlimited |
On-premise VoIP costs
If you’re looking to set up your own on-premises VoIP solution, then the costs are considerably higher, as you’ll need to purchase specialized equipment to create your own on-premises system (known as a PBX). So, how much can you typically expect to pay for this?
It really does vary, but as a good indicator, RingCentral lists typical costs for a team of 20:
- $6,500 for the PBX hardware
- $3,000 for the VoIP phones
- $1,000 for the setup and onboarding
- $4,000 for the software licenses.
These estimates don’t take into account additional IT staff or training, either. So, in this scenario, you’re looking at around $14,500 before you’ve even made your first call.
As you can see, there’s a reason that so many businesses opt for the hosted option instead! Setting up a hosted system costs around a tenth of this, so you can see why it’s so appealing to small and medium businesses.
VoIP and broadband costs
There’s one other cost that we haven’t mentioned so far because we think you’ve probably already got it covered by broadband. Unlike a traditional phone system, VoIP simply won’t work without the internet.
For consistently good VoIP service, you should be looking at an internet speed of 10Mbps. This is relatively undemanding, and you’ll find that this is far exceeded by most business internet packages. However, if you’re just starting out, it’s something to consider. Broadband rates for businesses vary hugely depending on your needs but tend to start at around $49.99 per month, going into the hundreds for larger, more demanding businesses.
Whatever the size of your business, you can get started with VoIP today using our quick comparison tool.
How Much Is VoIP Phone Equipment?
So, you’ve decided that VoIP is for you, and you’re happy with the monthly service costs involved. Remember what we said earlier – the monthly cost of the service doesn’t quite tell the whole story, and you’ll need to allocate a little more budget to get fully set up.
The main cost will be the phones themselves. You’ve got three options here: You can either deck out your office with VoIP-compatible phones, adopt softphones (we’ll explain these later), or buy a converter that will allow your current standard landlines to accept a VoIP signal.
VoIP softphone apps
If you’ve never heard of a softphone, it’s effectively simple software for a device like a computer or a tablet, which can be used to make phone calls. VoIP softphone apps are what companies like Zoom Phone provide you with.
Chances are that your employees already have computers on their desks, so a softphone could well prove the cheapest route to a full VoIP solution for your business.
A softphone is a software VoIP solution that lets employees make calls on their computers, without the need for dedicated telephone hardware.
Costs for softphones vary, but in the short term, it’s much cheaper than buying a dedicated handset. However, do consider what your long-term plans are and if you’d rather invest in VoIP phones.
VoIP adapter
A VoIP adapter is a device that can convert the signal for one phone to accept a VoIP signal and can be purchased for around $60.
While it may be tempting to keep your old hardware and just convert the signal, it’s worth remembering that while you can convert your old hardware to accept a VoIP signal, you may be missing out on some of the VoIP-specific features you’d find on a dedicated VoIP phone.
VoIP phones
If you’re looking to deck out your office with VoIP phones, then you can expect units to start from around $39.99 (the competitively priced Grandstream DP720), going into the mid-hundreds for models with all the bells and whistles. We’ve found in our research that a model like the Grandstream GXP2170, which retails for around $100, offers a great suite of features and won’t break the bank.
As well as standard VoIP phones, there are also models available that allow you to video call, too. Video conferencing has really taken off over the last few years, with the lingering impact of the COVID pandemic forcing many interactions to take place over a video call.
Want to learn more about telephone switchboards? Read our full guide on phone switchboards.
Installation Costs: What You Should Know
If you’re looking to install VoIP software on your existing business devices, like smartphones, tablets, or laptops, you won’t need to pay installation costs.
However, if you opt for VoIP desk phones, you can expect to pay around $25 to $50 per device for labor and installation costs – whether you’re going for a hosted or on-premise setup. For reference, this will cost up to $1000 for a team of 20.
Hidden Costs of VoIP: What to Know
While most up-front and monthly VoIP costs are clearly displayed, less obvious expenses can easily bump up the final price. Check out these frequently overlooked costs to avoid getting caught out:
- Taxes – IP telephony providers are legally required to charge various taxes to businesses relying on their service. The nature and amount of these taxes will depend on the location of your business common VoIP tariffs to look out for include local sales taxes, state taxes, city taxes, license taxes, and public utility taxes.
- Software add-ons – Lots of VoIP providers offer basic packages, with the option to extend the service with other capabilities like web conferencing and team messaging through paid add-ons. The cost of these add-ons vary so be sure to check prices with your provider before signing up.
- Number porting – While many VoIP providers let you transfer your old number to your VoIP system at no extra cost, some will charge a small fee for the service. For example, if you port your current number with Ooma, you’ll be expected to pay a one-time fee of $39.99.
- Integrations – To integrate with existing business tools, such as CRM systems, you may need to upgrade your VoIP plan. Other variables can include the program you wish to integrate with, for example.
- Network upgrade – You may need to upgrade your internet package to ensure clear, high-quality calls.
An Example of How Much You’ll Pay for VoIP
As we’ve discussed, an entire VoIP system can be relatively inexpensive, at least on the surface. Let’s take the time to look at the real-life cost of a VoIP plan for an office of say, twenty employees.
Let’s use Ooma office as an example, as the cost per user is currently $19.95. For twenty users, this equates to $399 per month. It’s worth noting that many providers operate on a sliding scale where the more employees the company has, the larger the discount. You can find out how much money you can save with Ooma by using our online tool, or check out the Ooma alternatives we’ve reviewed.
Next, let’s assume that in this scenario, we also want to deck out our team with new VoIP phones. Here the costs can vary wildly, but let’s take the Yealink T33G 4-Line PoE Gigabit IP Phone, which costs $77.50 at IP Phone Warehouse. Across twenty users, the cost totals $1550.
Another, optional cost is a headset. While not essential, many call handlers will feel more comfortable and be more productive using a headset. Again, RingCentral recommends the Jabra Evolve 40, which retails for around $121. Twenty of these come to $2,420.
In summary:
- 20 employees using Ooma: $399
- 20 Yealink T33G 4-Line PoE Gigabit IP Phones: $1550
- 20 Jabra Evolve 40 headsets: $2,420
In our example, we found that a typical, 20-person company can expect to pay an initial setup cost of $3,380 and an ongoing monthly cost of $399.
Remember that these costs are just a guide you could actually spend considerably less if you opted for softphones over physical ones, for example.
International call costs
It’s also worth taking into account the places that you’re expecting to call. The reason for this is that different providers charge different amounts to call certain countries. For example, if you make a lot of business calls to Mexico, then you’ll find that Ooma includes these in your service, while MagicJack charges $0.040 per minute.
Learn more with our MagicJack pricing guide
While some VoIP providers may look cheap on the surface, it’s worth checking their international call rates to make sure you don’t end up overpaying on a monthly basis. The good news is that VoIP calls abroad are a lot cheaper than traditional landline rates, but there are still large differences between the providers you choose. You can find some examples below:
RingCentral
- Australia – $0.025 per minute
- China – $0.039 per minute
- Spain – $0.039 per minute
- Mexico – $0.01 per minute
- United Kingdom – included in plan
Ooma
- Australia – $0.038 per minute
- China – $0.025 per minute
- Spain – included in plan
- Mexico – included in plan
- United Kingdom – $0.028 per minute
How Much Money Can VoIP Save You?
By shaving down costs associated with hardware, maintenance, and domestic and international calling, businesses can expect to save over 50% by trading in legacy phone systems for hosted VoIP software, according to Multicom Inc.
Aside from these immediate savings, the enhanced reliability, call quality, and feature sets of VoIP systems also help businesses boost their productivity and efficiency. This can hugely improve a business’s long-term return on investment (RoI) by giving them greater opportunities to generate leads and maximize conversions.
Interested in making the switch with an eye to big savings? Check out our guide to the top cheap VoIP systems.
We take our hands-on testing and impartial analysis seriously, so you can have complete confidence that we're giving you the clearest, most useful recommendations.
After conducting an initial exploration to identify the most relevant, popular, and established business phone platforms on the market, we assessed ten of the top VoIP systems across 78 areas of investigation.
Based on years of market research, product testing, and user needs analysis, we've established a VoIP system testing methodology that scores each product in seven main categories of investigation and 16 subcategories. This covers everything from the features and security options available to the product's value for money and customer score, as well as much more.
Our main testing categories for VoIP phone systems are:
- Customer Score: the feedback and ratings given by customers who have used a particular VoIP system, as well as the wider reputation a VoIP software holds.
- Cost: the pricing structure associated with the VoIP service, including factors such as monthly subscription fees, domestic and international call rates, setup fees, hardware costs, and extra costs like add-on features or services.
- Features: the functionalities and capabilities offered by the VoIP service, including basic features such as call forwarding, and voicemail, as well as more advanced features like auto-attendant, conference calling, and interactive voice response (IVR).
- External Connections: the VoIP service's ability to connect and integrate with external systems or devices. This can include compatibility with existing phone systems, mobile devices, or other third-party software.
- Customer Support: the assistance and resources provided by the VoIP service provider to customers, including online resources, knowledge bases, and access to customer support representatives and AI chatbots.
- Security Options: Security options refer to the measures and features implemented by the VoIP service to ensure the confidentiality, integrity, and protection of voice communications and data.
- Scalability: the ability of the VoIP service to accommodate the growth and changing needs of an organization, including its capacity to handle a growing number of users, support multiple locations or offices, and scale up or down.
When it comes to calculating a product's final score, not all testing areas are weighted evenly, as we know some aspects matter more to our readers than others, which are merely "nice to have." After hundreds of hours, our process is complete, and the results should ensure you can find the best solution for your needs.
Verdict: How Much Does VoIP Cost
As we’ve shown in this article, upgrading your business to a VoIP system can be cost-effective, and is certainly a much better option than a landline system.
However, remember that using a hosted VoIP system over an on-premise system will be considerably cheaper. As for your customers, they’ll still be getting exactly the same great service, just at less expense to you. With a hosted VoIP system, not only do you not need any additional hardware, but you’ll also have to do significantly less maintenance and troubleshooting, which will again save you money in the long run.
Now it’s time for you to pick the provider that best suits your needs and budget. We’ve shown you some of the best in the business at the top of the page, but for a bespoke quote, simply use our free comparison tool we can save you time, money, and effort by linking you with the best fit VoIP provider for your business.
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