A hosted Voice over Internet Protocol (VoIP) system is the most cost-effective solution for small businesses, costing around $10 to $30 per user, per month, if you use existing devices, compared with over $10,000 for an on-premise system with hardware costs.
The cost can vary depending on a lot of factors, including the size of your business and what kind of features you need. Luckily, for businesses on a tight budget, the cheapest VoIP phone services offer affordable solutions without compromising essential features.
In this guide, we’ll explain how much VoIP systems cost on average, and what you can expect to pay for your specific platform.
VoIP costs can vary depending on your choice of provider, number of users, setup, any network enhancements needed, and optional one-time VoIP desk phone costs.
In this guide:
- How Much Does VoIP Cost? Quick Answers
- VoIP Costs At a Glance
- What Is the Cost Difference Between Hosted and On-Premise VoIP?
- How Expensive is Setting up a VoIP System?
- What Is the Cost of VoIP Phone Equipment?
- How Much Does VoIP Installation Cost?
- What Are the Hidden Fees in VoIP Contracts?
- Real-World VoIP Cost Breakdown: 20-Person Business
- How We Test VoIP products
- Verdict: How Much Does VoIP Cost?
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-$15 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.
What Is the Cost Difference Between Hosted and On-Premise VoIP?
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 | ||
| $10–$30 per month | $500–$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 |
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 you — 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 that you have 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 to $30 per user, per month.
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 with any cash.
Below are a selection 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.
| Starting price The typical lowest starting price. The lowest price available for your business will depend on your needs | Free trial | Users | ||
|---|---|---|---|---|
| BEST FOR VALUE  |  |  |  |  |
| None | 14 days | 14 days | Free demo only | 30 days |
| Limit of 1,000 (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 private branch exchange or 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 as roughly $14,500, broken down as:
- $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 one tenth of this, so you can see why it’s so appealing to small and medium businesses.
VoIP and broadband costs
Tech.co research indicates that a minimum internet speed of 10Mbps is required for consistent VoIP call quality. 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.
Why is broadband key? Because, unlike a traditional phone system, VoIP simply won’t work without the internet.
Since most business internet packages significantly exceed 10Mbps, you may not need an upgrade unless you have a high volume of simultaneous calls or low starting speed.
Whatever the size of your business, you can get started with VoIP today using our quick comparison tool.
What Is the Cost of VoIP Phone Equipment?
Beyond monthly subscriptions, VoIP hardware costs typically range from $0 for softphones to $50 to $500 (or in some cases more) for dedicated IP desk phones.
In addition, equipment costs might include a monthly service fee.
How much do VoIP softphone apps cost?
A softphone is a software VoIP solution that lets employees make calls on their computers, often by downloading a simple app provided by the VoIP service provider, without the need for dedicated telephone hardware.
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.
How much do VoIP adapters cost?
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, it’s worth remembering that while you can convert it 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.
How much does a dedicated VoIP phone cost?
If you’re looking to deck out your office with VoIP phones, then you can expect units to start from around $25.44 (the competitively priced VTech CS6719), 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 $129, 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 hardware? Read our full guide on phone switchboards.
How Much Does VoIP Installation Cost?
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 $1,000 for a team of 20.
What Are the Hidden Fees in VoIP Contracts?
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 the service, such as a one-time charge of $39.99.
- Integrations: To integrate with existing business tools, such as CRM systems, you may need to upgrade your VoIP plan, which is typically another $10 to $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 over $10,000, depending on how many months were left and how many lines you contracted for.
- AI metering: An AI assistant may be a per-month cost, such as Zoom’s $8.33 per user, per month, AI Companion. However, with generative AI tools, you may be charged on a metered basis. Prices vary, but RingCentral’s AI Receptionist costs $59 per month, plus $0.50 per minute overages after the first 100 minutes.
Real-World VoIP Cost Breakdown: 20-Person Business
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, 20 employees.
Let’s use Ooma as an example, as the cost per user is currently $19.95 per month. For 20 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 $83.75 on IP Phone Warehouse. Across 20 users, the cost totals $1,675.
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 $157. For 20 of these the price comes to $3,140.
In summary:
- 20 employees using Ooma: $399
- 20 Yealink T33G 4-Line PoE Gigabit IP Phones: $1,675
- 20 Jabra Evolve 40 headsets: $3,140
In our example, we found that a typical, 20-person company can expect to pay an initial setup cost of $4,815 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. In fact, we recommend this approach for operations in sectors like logistics or field service, since softphone apps are more portable for remote employees.
Similarly, AI tools may be able to reduce your wage bill, if you follow a lean startup model by opting for an AI agent to handle your customer service needs.
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 for free in most plans but charges $0.029 in its Standard plan, 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: $0.039 per minute
- China: $0.039 per minute
- South Africa: $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
- South Africa: $0.070 per minute
- Mexico: $0.029 per minute
- United Kingdom: $0.028 per minute
Monthly vs annual billing
If you pay your bill annually instead of monthly, you’ll save between 10% and 30% of your total costs with most major VoIP providers.
Once you settle on a provider, we definitely recommend paying annually. You’ll get the best deal when you plan ahead. In fact, the provider prices that we cite in this guide are based off of an annual billing cycle.
What are the cheapest VoIP providers?
Zoom Phone is the least expensive while offering a lot of functionality, while RingCentral is the best value, with the most functionality at a reasonable price point.
- Zoom Phone is the clear budget winner for VoIP. The starting price for metered calls ($10 per user, per month) is the lowest on the market, but that’s not all. The unmetered plan ($15 per user, per month) and a more feature-rich plan ($18.33 per user, per month) still undercut the competition, while providing the same level of functionality as many competitors.
- RingCentral has the best value. It’s $25 per user, per month, Advanced plan isn’t cheap, but it unlocks a massive third-party integration library, with 500 pre-built apps to help connect your service to other systems.
Are there free VoIP services for business?
In the US, two of the best free VoIP services are Google Voice and TextNow, both of which offer unlimited domestic calls and texts.
While some VoIP providers offer a free plan, these plans all include limitations that are likely to be a problem for all but the tiniest businesses: international calls aren’t supported, while high-speed data is limited or non-existent.
If you want a free service, we’d recommend Google Voice, since it’s easy to upgrade to a paid plan, should your business grow in the future.
How Much Money Can VoIP Save You?
Businesses can expect to save over 50% on monthly bills by trading in legacy phone systems for hosted VoIP software, according to one estimate. That’s thanks to shaving down costs associated with hardware, maintenance, and domestic and international calling.
The enhanced reliability, call quality, and feature sets of VoIP systems also help businesses boost their productivity and efficiency.
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.
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 selected 10 top VoIP systems and took a deeper dive into their plans to find out more about the features and functionality on offer.
Based on years of market research, product testing, and user needs analysis, we've established a VoIP system research methodology that scores each product in eight core categories of investigation, which are broken down into 44 further subcategories.
With this framework we cover everything, from internal communication tools and security options to niche training features, and it ensures we can accurately assess each product's value for its price and suitability for different types of businesses.
Our main research categories for VoIP phone systems are:
- Call management features: The presence and quality of call handling features, including basic features such as call forwarding and voicemail, as well as more advanced features like auto-attendant and interactive voice response (IVR).
- Communication channels: Features designed to support communication other than calling, including integrations with websites and social media platforms.
- Training features: The presence and quality of features designed to support onboarding and training, like call barge, call whisper, and performance dashboards.
- 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: The measures and features implemented by the VoIP service to ensure the confidentiality, integrity, and protection of voice communications and data.
- Pricing factors: 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.
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.
Learn more about our research testing process
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 custom-fitted 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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