The Guide To VoIP Cost: Plan Pricing & How It Works
Switching from your legacy phone system to VoIP is a smart way to save money while getting all the features you need to run your business. But how much does VoIP cost? Whether you’re an Small Medium Sized Business (SMB) or large organization, there are a number of factors that will influence the amount it costs to implement and maintain a VoIP system.
In this guide, we’ll cover the key components of VoIP pricing so you understand what you’ll be paying and provide guidance on how to find a plan that fits your business needs and budget.
How Much Does VoIP Cost?
Voice over Internet Protocol (VoIP) phone systems provide businesses a less expensive way to communicate than traditional landline service. But how much does VoIP cost? On average, most plans range from $15 to $50 per user per month.
Extra features, such automatic call recording, AI agents, and phone rental, can be added on to your plan for an additional fee–often $5 to $15 more per user per feature.
The total cost for your organization will depend on a number of factors, but overall, you can expect to pay much less than for traditional phone service.
How VoIP Pricing Works
Traditional phone systems come with major expenses. Aside from your pricy monthly phone bill, there are hardware and installation expenses. Setting it up can take months, and you are responsible for maintenance and repairs on the hardware.
VoIP, does not require any major costs upfront. VoIP pricing works on a subscription-based model. The exact cost depends on how many people use the system, which features you choose, and whether or not you need hardware. Unlike traditional Private Branch Exchange (PBX) systems, equipment costs are significantly lower. You mainly pay for service, not for hardware.
Most VoIP providers charge per user or per line, per month. This means that each employee (or device/extension) that needs a phone number or VoIP account gets billed individually. Instead of purchasing hardware based on capacity you may need in the future, you pay only for what you need. If you need to add more users, it’s easy to scale up.
Factors that Affect Pricing
Because VoIP is more flexible than traditional phone systems, its cost can vary widely based on how your business uses it. Here are the key factors that influence what your total VoIP cost will be.
Number of Users or Lines
VoIP is typically billed per user, per month, but some providers offer pricing per line. Prices range from $15 to $50+ per user, per month, which means the more users you have, the higher the cost. However, many providers offer volume discounts so you pay less per user for larger teams.
Tiers of Service
One of the primary benefits of VoIP is you pay only for what is needed. This is true not only for the number of users, but also for the features included in the plan. Typically, VoIP providers offer a few tiers of service. Basic plans are the most affordable, ranging between $15 to $25 per user per month, but that price point comes with only basic phone features.
To get access to more advanced features such as auto attendants, call queues, video conferencing, call recording, CRM integrations, and analytics, you’ll need to upgrade to a mid-tier or premium plan. Mid-tiers range from $25 to $50 per user per month, while premium plans often exceed $50 per user per month.
Hardware
While VoIP requires much less hardware than traditional phone service, some equipment is required. All that is needed to make a call using VoIP is an internet connection and a device that can run the VoIP software like a computer or mobile phone.
If you decide to purchase specialized VoIP hardware, that will add to the costs. VoIP desk phones cost between $50 to $300+ each, while headsets range between $20 to $150. If you are switching from a legacy phone system to VoIP and already have analog phones, you can purchase Analog Telephone Adapters (ATAs) to use your existing phones with VoIP. ATAs cost between $50 to $100 each and can support multiple phones per adapter.
Add-On Services
Many providers charge separately for premium tools, requiring an add-on charge to your monthly rate. This allows you to only pay for the features you need, but it can add up if you use a lot of extras.
Unlimited domestic calls and basic business phone system features usually come with your plan, but premium tools like advanced call recording, integrations, virtual fax, texting, and additional phone numbers are usually extra. You can expect to pay between $5 to $20 per user per month for each add-on.
Contract Length
Another factor that affects VoIP pricing is your contract choice. You can usually save between 10% to 30% by signing an annual contract. Month-to-month pricing costs more but it gives you more flexibility to leave the service.
How Different Businesses Should Look at VoIP Pricing
Because every business has unique needs, VoIP pricing isn’t one-size-fits-all. The cost depends heavily on the size of the organization, how many employees need phone access, and which features are essential. When evaluating VoIP plans and providers, considering your business size will help you make smarter purchasing decisions.
Cost of VoIP for Small Businesses
Small businesses typically care most about affordability and simplicity. VoIP is ideal because it provides the value of a full-featured phone system without a large capital expenditure required up front. When assessing providers, look for:
- Transparent pricing: Your small business needs predictable costs without any hidden fees to surprise you.
- Easy setup: You may not have the budget to pay an IT professional. Look for VoIP platforms that are straightforward and user-friendly.
- Essential calling features: You may not require all the beZlls and whistles, but you do need a phone system that handles all your communication needs. Consider plans with unlimited domestic calling, voicemail, call routing, basic auto-attendants, and call forwarding.
- Mobile and remote capabilities: With your evolving business, being able to work from anywhere is essential. Look for plans with mobile access so you can work even if you’re not in an office.
Cost of VoIP for Medium-Sized Businesses
Mid-sized businesses need a balance of cost-efficiency and advanced functionality. With your business growing, you need more than a basic phone system can handle, but you’re not ready for the complexity of an enterprise-level setup. When assessing providers, look for:
- Advanced call management: More business means more communication. Look for providers with multi-level auto attendants, call queues, and advanced routing so you can better manage incoming calls.
- CRM integrations: Look for providers that offer integrations with CRM, helpdesk, and productivity tools so you can work more efficiently and provide better customer service.
- SLA-backed reliability: When your phone system is down, so is your business. Look for providers that offer reliability backed by Service Level Agreements.
- Collaboration: Features like team messaging, video conferencing, and file sharing are often crucial for better collaboration amongst team members.
Cost of VoIP for Enterprise Companies
Enterprises with 200+ employees and multiple locations need high reliability, deep integrations, and advanced communication workflows. You need customizable solutions that will scale with you. When assessing providers, look for:
- High-volume calling capabilities: Whether you’re running a sales team or service department, you need a phone system that can keep up with your call volume.
- Contact center features: Customers today expect to be able to contact your organization via multiple channels. Look for VoIP providers that offer contact center features so you can manage omnichannel customer communications.
- APIs and custom integrations: As a large business, your communication needs are more complex. Look for providers that offer open APIs so you can fully customize the platform to fit your complex workflows.
- Compliance and security certifications: As an enterprise, you handle tons of customer data daily. You need a VoIP provider that is dedicated to keeping your phone system secure.
Low Cost VoIP Service
If your budget is tight, it may be tempting to find the cheapest VoIP service possible. When it comes to VoIP, you tend to get what you pay for. There are some plans that start at $10 per user per month, but they generally offer a bare bones set of features. However, if you don’t need a complicated setup, a low-cost VoIP service may be exactly what you need.
Features commonly in a low-cost VoIP plan include:
- Unlimited or low-cost domestic calling
- A business phone number
- Voicemail
- Call forwarding and basic call routing
- Desktop or mobile app support
- Basic call management tools
- Business texting
If a simple plan doesn’t cover all your communication needs, there are some ways to reduce your VoIP costs. To save money, you can:
- Use softphones instead of buying hardware.
- Pick a plan that matches your basic needs so you don’t overpay for features you won’t use.
- Consider annual contracts. Many providers offer cheaper per-user pricing if you commit annually rather than pay month-to-month.
- Avoid or limit optional features like toll-free numbers, extra DIDs, call recording, or additional storage.
- Start small and scale up as needed.
VoIP Installation Costs
Most on-premise phone systems cost $10,000+ to install. One of the major benefits of VoIP is that setting up requires little to no installation and minimal hardware. Common VoIP installation costs include:
- Installation: Depending on the provider, there may be a small installation fee upfront ranging from $0 to $500, but many providers bundle setup and onboarding into the subscription.
- Hardware: If you purchase hard phones, you may pay around $3000 for 20 units. Headsets often cost around $50 a piece, and ATAs range between $50 to $100 but cover multiple phones.
- Porting: Some providers charge a one-time fee to port your number, which can cost up to $30 per number.
VoIP Costs Per Month
How much does VoIP cost per month? That depends on the plan you choose, number of features, and number of users. For a company with 20 users using a basic plan, your monthly cost would range between $300 to $400 per month, or $3,600 to $4,800 per year. If you have 200 users and a mid-range plan, expect to pay between $4,000 and $8,000 per month. Any add-ons, extra services, or toll-free numbers will drive that price up.
VoIP Phone Call Costs
When using a VoIP service, many business-oriented VoIP plans include unlimited calls in the US and often Canada as part of your monthly subscription. For calls that fall outside the “included” zone (such as international calls), providers often charge per minute.
Because of this structure, many businesses can treat domestic calls as “free” after paying the base monthly fee, but international calls will increase the bill. However, VoIP providers offer competitive rates ranging between $0.01 to $2.00 per minute for calls outside the country. If you make regular calls to a specific region, you may be able to purchase an international plan to save money.
Hidden VoIP Costs
While switching from traditional landline service to VoIP will cost you much less long-term, there are some hidden or unexpected VoIP costs you should be aware of:
- Taxes: Legally, your provider is obligated to charge you taxes. The amount depends on where you live, but can include local sales tax, state tax, city taxes, license taxes, or public utility taxes.
- Add-ons: Many VoIP providers advertise low base prices, but charge extra for features like automatic call recording, advanced analytics, additional phone numbers, among others.
- Integrations: In order to integrate your CRM software with your VoIP platform, you may have to upgrade to the mid-grade or premium plan, which can cost an extra $10 to $20 more per user per month.
- Number porting: Some providers charge extra to transfer your existing phone number to VoIP service.
- Network upgrade: You may need to upgrade to a faster internet connection with sufficient upload bandwidth and Quality of Service (QoS) enabled equipment.
- International calling: While domestic calls are usually unlimited, international calls typically cost per minute. Toll-free inbound calls can also cost per minute.
- Early termination fees: If you terminate your contract early, you may have to pay up to the remaining contract value.
Can You Get VoIP for Free?
Yes, some companies do offer free VoIP services, but it’s typically for personal use or solopreneurs. For example, as long as you live in the US and have a US phone number and Google account, you can get a phone number from Google Voice for free. You get free texting and calling, but the plan does not offer much beyond that.
In order to add more users or more advanced features, you’ll need to upgrade to a paid plan. Essentially, free VoIP can be a great way to test out the technology and support your solopreneur operation, but most SMBs need a paid plan.
Why Should You Switch Your Business to VoIP?
Switching your business to VoIP is one of the smartest, most cost-effective upgrades you can make to your communication system. Traditional business phone systems are expensive to maintain and not designed for the modern workplace. VoIP solves all that, while giving you more features for less money.
Aside from saving you money, VoIP offers these benefits:
- Easy scalability: With traditional phone service, scaling up requires purchasing more equipment and installing more lines. But with VoIP, you can add new users with a few clicks, no technician visits or wiring required.
- Remote-friendly: VoIP isn’t tied to a physical location. Your team can make and receive business calls from anywhere with desk phones, laptops, smartphones, and softphone apps.
- Reliability: Modern VoIP providers offer more reliability than landline service. With redundant data centers, failover routing, and backup options, your business stays connected when it matters most.
- Improved collaboration: Many VoIP platforms offer more than just voice calls. With messaging, video meetings, business texting, and collaboration tools in one platform, you can collaborate more efficiently within a single platform.
Finding a Provider
VoIP pricing offers more advanced features at a lower cost than traditional phone service. If you’re ready to make the switch, you’ll want to compare multiple providers to find the right plan for your organization.
VienerX can help. We take our time to understand your needs and offer personalized recommendations so you can make better tech buying choices. Contact VienerX today to see how our expert staff can help you upgrade your business telecommunication!
