In-house vs outsourcing cost calculator

How the number is worked out

A loaded seat is the monthly salary multiplied by one plus the employer percentage, plus the monthly desk, equipment and software cost, plus the annual hiring and training cost divided by twelve. The in-house total is that loaded seat multiplied by the number of seats. The outsourced total is the quoted rate multiplied by the number of seats. The saving is the in-house total less the outsourced total, shown as money and as a share of the in-house cost. The break-even rate is the loaded cost of one in-house seat.

Benchmarks worth comparing against

A worked example, with the arithmetic shown

A US company is deciding whether to run three customer support seats in-house or outsource them. Salary is $3,500 a month each. Employer cost on top is 30%. Desk, equipment and software come to $400 a month per person. Hiring and training runs $6,000 per person per year. The outsourced quote is $2,400 per seat per month.

A loaded seat is $3,500 multiplied by 1.30, so $4,550, plus $400 of desk, plus $6,000 divided by 12, which is $500. That is $5,450 a month for one seat. In-house is $5,450 multiplied by 3 seats, so $16,350 a month, or $196,200 a year. Outsourced is $2,400 multiplied by 3, so $7,200 a month, or $86,400 a year.

The saving is $109,800 a year, which is 56% of the in-house cost. And the break-even rate is $5,450 per seat per month: any quote below that saves money on cost alone, any quote above it does not. Note how far the loaded seat sits above the $3,500 salary that started the conversation: $1,950 a month more, which is 56% on top of pay. That gap is the whole reason salary-to-quote comparisons mislead.

The employer percentage is the input people get wrong

It is also the one with genuinely good public data behind it. The US Bureau of Labor Statistics measured benefits at 30.1% of total compensation for private industry workers in March 2026, which works out as $14.01 an hour on top of $32.60 of wages, or about 43% on top of pay rather than 30%.

Read the definition before you copy the number: a share of total compensation and a percentage on top of salary are different arithmetic, and the calculator wants the second.

Eurostat put non-wage costs at 24.8% of total labour costs across the EU in 2025, and the spread between member states is enormous: 4.8% in Romania against 32.3% in France. In the UK, employer secondary Class 1 National Insurance is 15% on earnings above £5,000 a year for 2026 to 2027, before pension contributions or anything else. If you operate across several countries, run the calculator once per country. A single blended figure hides the only comparison that matters.

Everything is worked out in your browser. Salaries are sensitive, so it is worth saying plainly: nothing you type is sent to us, nothing is stored, and there is no sign-up.

What this calculation does not account for

• Productivity. Two seats compare only if they do the same volume to the same standard. If an outsourced seat handles 20% fewer tickets, the effective rate is 20% higher than the quoted one, and the break-even figure moves with it.
• Management time. Outsourcing relocates supervision rather than removing it. Somebody on your side still writes the brief, checks the work and owns the relationship.
• Transition. Documenting a process well enough to hand it over is a real one-off cost, and it usually lands entirely in the first quarter.
• Risk and control. Speed of change, data handling and who is accountable when something breaks are not costs, but they belong in the decision beside the cost.
• Redundancy. Replacing an existing team carries its own legal and severance cost, which this does not model at all.

When to outsource, and when to hire

Cost decides less of this than a cost calculator implies. Three questions decide more.

Is the work written down? If the process lives in one person’s head, outsourcing begins with documenting it, and that effort lands before any saving does. Does the volume justify a whole person? A role needing fifteen hours a week is a poor full-time hire and a good part-time desk, which is why the calculator accepts fractional seats: enter 0.5 and every figure scales with it.

And how often does the work change? A process rewritten monthly costs more to hand over than it saves, because each change becomes a briefing rather than a decision.

Where the answers are yes, yes and rarely, the arithmetic really is the decision. Where they are not, the break-even rate is still worth having, but as a negotiating position rather than a verdict.

When to stop calculating and talk to someone

Stop when cost is no longer the open question. A saving of 56% settles the arithmetic and opens a different conversation: whether the work is documented well enough to hand over, what happens to your data, and what the contract has to say. Our post on outsourcing digital marketing and BPO covers the Article 28(3) data processing requirements that follow, which is the part cost calculators never mention.

Stop, too, when the break-even rate is close to the quotes you are getting. Within ten per cent, the decision turns on productivity and control rather than price, and neither reduces to a monthly figure. Our BPO services page sets out how desks are staffed and measured, the published starting rates are on the offers and pricing page, and the Atrio Home Health Care billing desk shows the shape of the work in practice.

If the seats you are costing exist to answer the same questions all day, there may be a third option worth pricing: the project planner will tell you whether automation or a better website removes some of that volume before you staff it. Or bring your payroll figures to a free consultation and we will work through the loaded cost with you.