How Much Does VoIP Cost? Price Breakdown

When it comes to VoIP costs, you can expect to pay around $20 to $30 per user, per month for a hosted VoIP system that utilizes existing computer and mobile devices your business owns. 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 $20-$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.

In this guide, we cover:

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

VoIP Costs Explained: A Summary

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.

In 2023, 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 find you the perfect provider – 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 $20 – $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 2023), 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.

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 the typical cost:

• $6,495 for the PBX hardware
• $3,000 for the VoIP phones
• $1,000 for the setup and onboarding
• $4,000 for the software licenses.

This is for a 20-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 a competitive quote.

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 $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 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. It's effectively 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 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.

VoIP adapter

A VoIP adapter can be purchased for around $60, and is the name for devices that can convert the signal for one phone to accept a VoIP signal.

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 a 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.

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

Confused about phone switchboards? Read our full guide.

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.

Zoom Phone, which is our choice for the best value when it comes to VoIP providers, starts at only $10 per user, per month, which means for twenty employees, you're looking at around $200 per month.

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

The Benefits of a VoIP System

No matter how much VoIP costs, nobody would investing if there weren't good reasons to do so.

Whether you're interested in VoIP for international calls, or just looking for the cheapest all-inclusive VoIP system to streamline your processes, you'll be sure to reap a number of benefits.

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