How Much Does VoIP Cost? Price Breakdown

You can typically expect to pay around $20 to $30 per month per user for VoIP communication, however VoIP costs can vary depending on your VoIP provider, level of features, type of hosting and other factors, as well as optional costs for switching or adding hardware.

If you look at our comparison table below, you'll notice that most services start from around $20 per month, but this doesn't tell the full story. So how can you make a decision on which provider offers the best deal? If you want a quick answer, you can use our free tool to find the best service for you, at the best price, depending on your particular business needs.

If you’ve already done some research before landing on this page, you’ll know that there are plenty of VoIP options out there and the price you'll pay isn’t always clear! VoIP is a topic close to our hearts at Tech.co, and one we've been advising people on for years. That's why, in this guide, we’ll walk you through exactly what you should be paying for various aspects of VoIP, and any other extra costs that you may not have considered (although don’t worry – signing up for a standard VoIP service is pretty straightforward).

If you're not in a hurry, then read on, and let us break down the mysteries of the cost of VoIP. By the end you'll be a VoIP expert, and ready to find your perfect VoIP provider.

In this guide you'll learn:

• How Much Does VoIP Cost?
• How Expensive is Setting up a VoIP System?
• How Much is a VoIP Phone?
• An Example of How Much You'll Pay for VoIP
• Verdict: Buying the Right VoIP System
• FAQs

VoIP Costs Explained

Generally, businesses can expect cloud-hosted VoIP to cost from $20 per user per month, with the additional cost of equipment where needed, such as dedicated VoIP phones (from around $50) and headsets ($80). On-premise VoIP is considerably more expensive, with initial setup potentially costing over $10,000.

As you can see, the cost of VoIP can vary hugely, depending on the type of service you opt for. That’s because VoIP typically comes in two flavors – hosted, and unhosted (on-site). Before you panic, we’re not about to start throwing tech terms at you. In fact, the explanation is actually quite clear:

• Hosted – You pay the provider to host the VoIP service for you, and it handles the equipment and tech at its end.
• On-site hosting – Equipment is hosted locally at your businesses, and you are responsible for maintenance and troubleshooting.

Many 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.

Many businesses opt for the hosted option as it’s considerably cheaper, and it also saves a lot of headaches when it comes to potential tech issues (in essence, it’s not your problem).

So then, how much can you expect to pay? We’ve researched the pricing structures of the main players in the VoIP space, and you can expect to spend around $20 to $30 per month, per user for a hosted VoIP system. There are some exceptions to this, depending on what extra equipment you need to purchase (more on that later), the number of employees who need access to the system, and the cost of international calls, but this figure is a solid starting point.

If you’re looking to host your own VoIP system, then you’ll find that early on, the costs will be substantial. You must effectively create a whole new VoIP system from scratch, at your premises. You can expect this to total around $500 – $1000 per user, and even when you’re up and running, there will be additional maintenance costs, not to mention additional IT expenses. Whether you are looking for hosted or on-site VoIP solutions, our free comparison tool will find you the perfect provider.

How Expensive is Setting up a VoIP System?

As we’ve mentioned, if you go for the hosted option for your VoIP, there are few setup costs to consider, outside of ensuring that your internet speed is up to scratch, and any compatible phone devices. In this scenario, you’re looking at a flat fee per user per month. The cost of this will depend on the package you go for, and the number of staff you want to sign up but expect to pay around $20 to $30 per user.

If you’re looking to set up your own on-premise VoIP solution, then the costs are considerably higher, as you'll need to purchase specialized equipment to create your own on-premise 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 the typical cost of $6,495 for the PBX hardware, $3,000 for the VoIP phones, $1,000 for the setup, and a further $4,000 for the software licenses. This is for a twenty person team, and doesn’t take into account additional IT staff or training. So, in this scenario, you’re looking at around $14,500 before you’ve even made your first call. It may sound daunting, but our quick comparison tool can get you an understandable, competitive quote for your business.

As you can see, there’s a reason that so many businesses opt for the hosted option instead!

For an onsite VoIP system, you’re looking at around $14,500 before you’ve even made your first call. By contrast, setting up a hosted system costs around a tenth of this perfect for small and medium businesses.

There's one other cost that we haven't mentioned so far, because we think you've probably already got it covered 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 $35 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 a VoIP Phone?

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 an 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 Adapter

A VoIP adapter starts at around $60, for a device that can convert the signal for one phone. 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 $50 (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 GXP12170, 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 year, with the pandemic forcing many interactions to take place over video call. Even when the panic subsides, the traditional working model seems set to allow for more home working than ever before, so investing in video conferencing equipment now could be the smart move. A model that allows video calls may sound expensive, but in actual fact, you can find video VoIP phones for less than $200. The Cisco 8845 is an excellent model for those who want video calls on a budget, costing around $165.

Some VoIP providers will help you find the right phone, or include them in their package. Use our quick comparison tool for a VoIP quote for your business.

Confused about phone switchboards? Read our full guide.

VoIP Softphone

So we’ve discussed converting old phones, dedicated VoIP phones, and video phones, but there’s also another option softphones. If you’ve never heard of a softphone, it’s simple software for a device like a computer or tablet, which can be used to make phone calls. 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 as an example, Nextiva charges $3 per user per month for the use of a softphone. In the short term, it’s much cheaper than buying a dedicated handset, but do consider what your long term plans are and if you’d rather invest in VoIP phones.

We've researched the best VoIP phones on the market find out what we recommend.

An Example of How Much You'll Pay for VoIP

As we've discussed, VoIP can be relatively inexpensive, at least on the surface. You might think that around $20 a month seems more than reasonable and be ready to take the plunge, but it's worth considering any outside costs too before committing.

The good news is, there aren't any nasty surprise charges that will come out of left field, at least not with any of the providers we've mentioned on this page. Let's take the time to look at the real life cost of a VoIP plan for an office of say, twenty employees.

If we take Ooma for our example, 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.

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 Polycom VVX 150 phone, which is offered by RingCentral for $89 (or $3.99 per month). Twenty of these models comes to $1,780.

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 $80. Twenty of these come to $1,600.

In summary:

• 20 employees using Ooma $399
• 20 VoIP Polycom VVX 150 phones $1,780
• 20 Jabra Evolve 40 headsets $1,600

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. For a bespoke quote for your business, use our online tool to find the best price for you.

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 pricing 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 $0.022 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. Below we've directly compared Ooma and MagicJack's call rates to give you an example:

FAQs