How Much Does VoIP Cost? Full Price Breakdown, Hidden Fees Explained

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 the full story.

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

VoIP Costs Frequently Asked Questions

VoIP Costs At a Glance

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.

Today, 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, 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 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, our research says 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 costs vary

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.

RingCentral is a popular software. With it, a call pop-up appears on your screen when you’re receiving an incoming call. Source: Tech.co testing

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 costs start at around $60

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 phone costs start at around $40

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. Paid add-ons might cost around $10 per user per month, although costs vary widely.
• 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 theCn 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, which is often another $10-$20 per user per month more than the starter 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.
• Termination fees – Cancel your contract before it’s complete, and you’ll be on the hook for the early termination fee (ETF). This is often the entire remaining balance due, which might easily run past $10,000, depending on how many months were left and how many lines you contracted for.

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 (such as Net2Phone) 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. Our research team found that the costs can vary wildly, but let’s take the Yealink T33G 4-Line PoE Gigabit IP Phone, which is listed at $77.50 on 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. This sets some providers apart from others. Take Ooma and magicJack 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. Plus, modern VoIP systems typically offer video and SMS messaging channels as well, offering more communication flexibility. 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 for some specific examples of the most inexpensive VoIP plans on the market. Spoiler: Zoom Phone is the winner, starting at just $10 per user, per month.

How We Test VoIP Products