Is Managed IT Cheaper Than In-House? The Real Numbers for Australian SMBs

The managed vs in-house IT debate is one of the most common conversations we have with Brisbane business owners. And almost universally, they arrive at the conversation believing that in-house IT is cheaper. By the time we finish running the numbers, they realise it's not even close.

The misperception exists because in-house IT has one visible, dominant cost: the salary. Everything else — super, leave, training, tools, coverage gaps — tends to be invisible until it bites you. Managed IT, on the other hand, presents a single clear monthly invoice that feels large relative to "just paying one person."

In this article, we're going to run the full analysis for a 20-person Brisbane business. We'll use real, current market rates. And we'll look beyond cost to the strategic dimension — because for many businesses, the cost argument is actually secondary to the capabilities argument.

The True Cost of an In-House IT Person

Let's start with what it actually costs to employ an IT support person in Brisbane. The 2024 SEEK salary data puts the median salary for an IT Support Engineer at $75,000–$90,000 per year. We'll use $82,500 as our benchmark for a mid-level hire.

Salary + Super + Leave Loading

Base salary: $82,500. Superannuation (11% in 2024-25): $9,075. Annual leave loading (17.5%): approximately $2,500. Total employment cost before anything else: $94,075 per year — or $7,840/month.

Recruitment and Turnover Costs

The average IT role takes 6–8 weeks to fill, using a recruiter charging 15–20% of first year salary. That's $12,000–$16,500 per hire. IT staff in Australia have a median tenure of 2.3 years, so amortised over the employment period, this adds $450–$600/month to the true cost. And when they leave — and they will — you face both the recruitment cost again and a productivity gap while you rehire.

Training and Certifications

The technology landscape evolves rapidly. An IT professional needs ongoing training to stay current. A realistic training budget is $3,000–$8,000/year for certifications, conferences, and self-study. That's $250–$670/month.

Tools, Software, and Licenses

In-house IT requires a professional toolkit: Remote management software, ticketing system, monitoring tools, security software, backup solutions. A bare-minimum toolkit for a solo IT person costs approximately $800–$1,500/month in SaaS licensing. In managed IT, this is built into your monthly fee.

Coverage Gaps

One person cannot provide 24/7 coverage, adequate holiday cover, or protection against sick leave. When your IT person is on annual leave or off sick, you either manage without support or pay for expensive contract IT labour ($150–$200/hour). Realistically, gaps in coverage cost $500–$1,500/month averaged across the year.

The Full In-House Cost Summary (20 Users)

And this doesn't include the cost of what that one person simply cannot do — 24/7 monitoring, enterprise security, cloud architecture, strategic IT planning, or having a second opinion when they're unsure.

The Cost of Managed IT Services (20 Users)

For a 20-user business on our Professional plan at $149/user/month:

• Monthly cost: $2,980 + GST
• Annual cost: $35,760 + GST
• What's included: 24/7 monitoring, unlimited helpdesk, patch management, security (SIEM, EDR), Microsoft 365 management, backup and DR, dedicated account manager, quarterly business reviews, compliance reporting

The cost difference is stark: $129,335 per year (in-house) vs $35,760 per year (managed IT). That's $93,575 in annual savings — or nearly 2.6x the cost of managed IT.

Beyond Cost: The Capabilities Argument

Even if in-house and managed IT cost the same, the capabilities argument would often still favour managed IT for businesses under 100 staff. Here's why:

Breadth of Expertise

A single in-house IT person is a generalist with gaps. They're strong in some areas and weaker in others. A managed IT provider brings a team — specialists in networking, security, cloud, helpdesk, and strategy — all available to you without hiring six separate people.

Current Technology Knowledge

An MSP's business model depends on staying at the cutting edge of technology. Their team is constantly training, being briefed by vendors like Microsoft, and implementing new solutions. An in-house hire falls behind unless they have significant training budgets and time allocation.

Scale and Redundancy

When your IT person is sick, on leave, or has resigned, you're vulnerable. An MSP has 10, 20, or 50 engineers available — the redundancy is built in.

When In-House IT Does Make Sense

We're honest with businesses: there are scenarios where in-house IT makes sense, and we'd rather help you make the right decision than just pitch managed services.

• Large organisations (100+ staff): At this scale, a hybrid model typically makes sense — internal IT staff for day-to-day issues and strategic direction, with an MSP for specialist services and after-hours coverage.
• Highly specialised industries: Some industries (defence, specific research sectors) require on-site staff with specific clearances or knowledge that can't be managed remotely.
• Heavy custom development environments: Businesses with large in-house software development teams often need dedicated IT support embedded in the development process.

The Hybrid Model: Best of Both Worlds

For businesses between 50–150 staff, a hybrid model often delivers the best outcome. An internal IT coordinator (or operations manager with IT responsibility) handles day-to-day requests and maintains vendor relationships, while a managed IT provider delivers the specialist capabilities, monitoring, security, and strategic guidance.

This model typically costs $5,000–$8,000/month all-in — still significantly less than a full in-house IT team — while delivering far more capability.

Making the Decision: Questions to Ask

When evaluating whether to hire in-house or use managed IT, ask yourself:

• Do I need someone on-site every day, or just fast response when something goes wrong?
• Can I afford the coverage gaps of one person (holidays, sick leave, resignation)?
• Do I need specialist skills beyond what one person can provide?
• Am I prepared for the total cost of employment, not just the salary?
• Does my IT need align with a generalist or multiple specialists?

Conclusion

For the vast majority of Brisbane businesses with 10–80 staff, managed IT services cost significantly less than in-house IT while delivering meaningfully more capability, coverage, and strategic value. The salary-vs-invoice comparison that makes in-house feel cheaper evaporates when you account for the full employment cost.

If you'd like to run the numbers for your specific business — taking into account your actual staff count, IT requirements, and current setup — our free IT Cost vs Value Assessment does exactly that.