How to Price Managed Services: Per-User vs Per-Device, and Finding Your Real Cost Floor

Ask ten MSP owners how they arrived at their per-user price and eight will tell you a story that ends with "and it seemed about right." The number came from a previous employer, a peer group, or a forum thread, and it has been adjusted upward a couple of times since, cautiously.

There is nothing wrong with market-based pricing. The problem is doing it without knowing your floor. If you do not know what a managed user costs you — tools, licensing, labour, overhead — you cannot tell whether a $125 seat is a 60% margin or a 15% one, and you cannot tell which client, if any, you are losing money on. This guide is the arithmetic, then the pricing models, then the price.

Step One: Your Cost Per Unit

Every managed client consumes three kinds of cost.

Tool and licensing cost. RMM, endpoint protection, backup, email security, password management, documentation, PSA, the Microsoft or Google licensing you resell. Each is billed to you per device, per user, or as a flat monthly amount. This is the easy part, because it is on invoices.

Labour. Technician time on tickets, patching, projects, and the quarterly review nobody bills for. The hardest to pin down and the largest number.

Overhead. Rent, insurance, vehicles, the owner's salary, sales time, admin. Real, and usually ignored in per-seat maths.

Start with tools, because it is the number you can get exactly right this afternoon.

Working out tool cost per user and per device

List every subscription with its monthly cost and how it is allocated — per device, per user, or per technician. Then divide each by the matching count across your whole managed base.

A worked example for a shop managing 400 users and 520 devices with four technicians:

That gives roughly $9.10 per device and $3.15 per user in tools, plus $216 per technician a month that has to be spread across the base — about $2.16 per user at this size. Call it $5.30 per user plus $9.10 per device before anyone has answered a ticket.

Most MSPs have never done this sum and are surprised by the device number. It is why per-user pricing for a client with 1.8 devices per user quietly loses margin.

This is exactly the calculation NeroEngine's cost calculator does: enter each tool, its cost and allocation, and your managed counts, and it returns per-user, per-device, and per-admin rates that you can use as the unit cost on every service in your catalog. Quotes then show margin rather than just price.

Adding labour

The honest way is to measure it: hours logged per client per month, from the PSA, times a loaded technician rate. If you do not have that data, the industry rule of thumb for a well-run shop is 0.5–1 technician hours per user per month, all-in. At a loaded cost of $45 an hour, that is $22–$45 per user.

The range is wide because clients are wide. A law firm with modern Macs and a good office manager sits at the bottom. A manufacturer with a shop-floor PC on Windows 7 and a warehouse Wi-Fi problem sits well above the top. Your per-user price has to cover the average, and your contract has to protect you from the outliers.

Adding overhead

Take total monthly overhead that is not tools or technician labour, and divide by managed users. For a small shop this lands anywhere from $10 to $30 per user. It is the number most often left out, and leaving it out is how an MSP with "60% margins" has no money at the end of the year.

Floor, for the example shop: $5.30 tools + $30 labour + $18 overhead = roughly $53 per user per month, plus $9.10 per device. Everything above that is margin.

Step Two: Pick a Model

Per user

One price per person, covering their devices within reason. The cleanest to quote, the easiest for a client to sanity-check against headcount, and the model most MSPs have converged on.

The risk is device sprawl: the client who gives everyone a laptop, a desktop, and a tablet. Cap it — "up to two managed devices per user" — and price the third.

Per device

One price per endpoint, sometimes with a separate rate for servers. Maps more precisely to your tool costs. Feels punitive to clients, invites arguments about what counts as a device, and makes the invoice change every month.

Best for environments where devices and people are genuinely decoupled: shared workstations in clinics, kiosks, manufacturing.

Tiered or bundled

Bronze, silver, gold — a per-user price for each of three service levels. Lets the client self-select and lets you upsell without renegotiating. The trap is designing tiers by what you can strip out rather than what the client needs; a "bronze" with no backup is a liability for both of you.

Flat monthly

A single number for the whole client, reviewed annually. Simple, and it hides the unit economics from you as well as from them. Fine for tiny clients where the arithmetic is not worth the admin.

For most MSPs under twenty staff: per user, device cap, two or three tiers, with servers and network hardware priced separately as managed devices.

Step Three: Set the Price

With a floor of $53 per user, the question is what margin you need. Not what feels fair — what the business needs to keep operating, cover the owner's time properly, and fund the next hire before the current team burns out.

A healthy managed services gross margin sits between 50% and 65%. On a $53 floor, that puts the per-user price between $105 and $150, which is, not coincidentally, where the market for competent small-business managed IT sits in most of North America.

Three checks before you commit:

The discount test. A good prospect asks for 15% off. Can you say yes and still be above 45% margin? If not, your list price is your floor and you have no room to close.

The outlier test. Your worst client, in hours per user — are they still profitable at this price? If not, either the price is too low or that client needs a different contract.

The growth test. At this price, does adding twenty users fund a proportional share of the next technician? If each new client makes the team busier without making a hire affordable, the price is subsidising growth from the owner's evenings.

What to Do About Existing Clients

Repricing an existing base is the part owners put off. Two approaches that work:

Reprice at renewal, with a reason. A new service in the bundle — security awareness training, an EDR upgrade — justifies a new price. "Same service, more money" invites a competitive quote; "more service, more money" usually does not.

Grandfather, but cap the gap. Long-standing clients at the old price stay there for a year, then move up in two steps. Nobody should be paying 40% less than a client who signed last month for the same stack.

Either way, do the floor calculation per client first. There is nearly always one that has been losing money for years, and knowing which one changes the conversation.

Common Questions

What is a typical per-user price for managed IT? In 2026, $100–$175 per user per month for a full stack — RMM, EDR, backup, Microsoft 365 management, help desk — for businesses of 10–100 staff. Below $90 usually means something is missing from the bundle or from the margin.

Should hardware be included in the monthly price? Hardware-as-a-service can work, but it turns you into a leasing company with the balance sheet to match. Most small MSPs are better off quoting hardware as a one-time line, separate from recurring services, with a deposit.

How do I price a client with a lot of servers? Servers are managed devices with their own rate — typically $100–$300 a month each depending on backup and patching requirements. Do not fold them into the per-user number; it makes the per-user price look high and hides what the servers actually cost.

Do I need to show the client my margin? No. Show them a per-user price and a monthly total, with recurring and one-time items clearly split. The margin is for you — but you should be able to see it on every quote you send, which is why the cost floor belongs in your quoting tool rather than a spreadsheet you check once a year.

Once the price is set, the quote has to carry it cleanly. Our quoting and proposal software guide covers presenting recurring versus one-time pricing, and the MSP sales process guide covers where pricing sits in the conversation.