Average SaaS Spend Per Employee: Benchmarks and What to Do About It

In today's digital-first business landscape, SaaS is the lifeblood of almost every small and medium-sized business. From communication platforms like Slack to CRM systems like HubSpot, project management tools like Asana, and marketing automation like Mailchimp, these tools power modern teams. But all of that convenience adds up fast.

One of the most useful operating metrics to track is SaaS spend per employee. It gives you a simple benchmark, helps you sanity-check whether your software costs are reasonable, and quickly highlights when spending has drifted higher than it should.

So what's normal? And what should you do if your number looks high?

Industry Benchmarks: What SMBs Are Really Spending

While exact figures vary by industry, company size, and complexity, a practical benchmark for SMBs in the US and Australia is:

Typical annual SaaS spend per employee: $400–$800

A rough breakdown:

• Small businesses (1–50 employees): around $400–$650 per employee per year
• Medium businesses (51–250 employees): around $600–$800+ per employee per year

These figures represent recurring software subscription costs only. They do not include hardware, internal IT salaries, or custom development.

What's Considered Normal by Company Size?

• Under 10 employees: Often closer to $300–$500 per employee annually
• 10–50 employees: Usually $400–$700 per employee annually
• 50–250 employees: Often $700–$900+ per employee annually

These are guidelines, not rules. A technical product company will naturally spend more than a traditional service firm. The goal is not to chase an arbitrary number. The goal is to understand whether your spend is justified.

Warning Signs You're Overspending on SaaS

Your SaaS spend per employee is worth investigating if:

1. 1Your number is well above the benchmark for your size
2. 2No one person can confidently list all the software you pay for
3. 3You get hit by surprise auto-renewals
4. 4Different teams use different tools for the same job
5. 5You haven't renegotiated major renewals in a long time
6. 6Software costs keep rising faster than headcount

Those signs usually point to the same underlying issues: unused tools, duplicate subscriptions, old seats, and plans that were never rightsized.

How to Calculate Your SaaS Spend Per Employee

Step 1: Tally Your Total Annual SaaS Spend

• Manual approach: Go through bank statements, credit card bills, and accounting records from the last 12 months and add up every recurring software subscription.
• Automated approach: Use StackSmart to detect and categorize recurring SaaS charges from your transaction data.

Let's say your total annual SaaS spend is $30,000.

Step 2: Get Your Current Employee Count

Include full-time staff, part-time staff, and long-term contractors who use your core SaaS tools regularly.

Let's say you have 40 employees.

Step 3: Divide Total Spend by Employee Count

SaaS Spend Per Employee = Total Annual SaaS Spend / Number of Employees

Using the example:

$30,000 / 40 = $750 per employee

Now you have a number you can benchmark.

What to Do If You're Above Benchmark

Being above the benchmark doesn't automatically mean you have a problem. But it does mean you should investigate.

1. Run a Full SaaS Audit

You need to understand what you're paying for, who uses it, and whether it still earns its keep. Look for unused licenses, duplicate tools, over-tiered plans, and forgotten subscriptions.

2. Renegotiate What You Can

Especially for annual renewals, ask for better terms. Many SaaS vendors will reduce pricing to keep a customer, particularly if you start the conversation early.

3. Consolidate Redundant Tools

If two tools do the same job, standardize on one. This reduces spend and often makes the team more efficient.

4. Put Basic Controls in Place

Track all subscriptions and costs, renewal dates, tool owners, and notes on actual usage. This can be a spreadsheet, but it's better if it's a system someone actually reviews.

Mid-Article Reality Check

If your benchmark number is high, don't jump straight to cancellations. First identify what's genuinely waste and what's actually helping the business run. This is where the full SaaS audit process matters, and where smart cost reduction tactics prevent you from saving a little money while creating bigger operating problems.

5. Review Quarterly

Your stack changes as the business changes. Review it every quarter so software spend doesn't quietly drift upwards again.

Final Thoughts

SaaS spend per employee is one of the simplest ways to pressure-test your software costs. It won't tell you everything on its own, but it tells you when to look closer.

If your number is high, that's not a reason to panic. It's a reason to audit the stack, remove waste, and make sure every subscription is still earning its place.

For the full process, start with our SaaS Spend Audit guide. If you're already in cost-cutting mode, follow our guide on how to cut SaaS costs without slowing your team down.