Published 2026-02-04 by TechNet New England
Business owners frequently ask how much they should spend on IT. The answer depends on your industry, business model, and operational requirements. Here are current benchmarks based on 2025 research.
General Benchmarks
According to data from Deloitte and Gartner:
- Most small businesses spend between 2% and 7% of annual revenue on IT
- Businesses with less than $50 million in annual revenue typically average 4% to 6.9%
- Average technology spend rose from 4.25% of revenue in 2020 to approximately 5.5% in 2022 and has held near 5% through 2025
Per-Employee Calculations
For businesses that prefer per-employee budgeting:
- Businesses with 10 to 49 employees often budget $125 to $175 per seat per month
- A 10-person company earning $1 million in revenue can expect to spend $2,000 to $3,000 per month on IT
Industry Variations
IT spending varies significantly by industry due to different regulatory and operational requirements:
Higher IT Spending Industries
- Healthcare - HIPAA compliance, EHR systems, and medical device integration require substantial IT investment
- Financial services - Regulatory requirements, transaction security, and compliance reporting drive costs
- Legal services - Document security, e-discovery capabilities, and client confidentiality requirements
- Professional services - Client data protection and collaboration tools
Moderate IT Spending Industries
- Manufacturing - Operational technology, inventory systems, and supply chain management
- Retail - Point of sale, inventory, and e-commerce platforms
- Construction - Project management, bidding systems, and mobile workforce tools
What Your IT Budget Should Include
A complete IT budget typically covers:
Infrastructure
- Computers, servers, and network equipment
- Internet connectivity and phone systems
- Cloud services and subscriptions
Security
- Endpoint protection and antivirus
- Firewall and network security
- Backup and disaster recovery
- Security awareness training
Support and Management
- Help desk and technical support
- System monitoring and maintenance
- Software updates and patch management
Strategic Investment
- New technology adoption
- Process automation
- System upgrades and modernization
2025-2026 Spending Trends
Current trends affecting IT budgets:
- Security and compliance remain the fastest-growing areas, with global cybersecurity spending projected to grow 12.5% to $240 billion
- Cloud services continue to grow, with over 60% of businesses planning to increase cloud spending
- AI and automation investments are increasing as businesses seek productivity gains
- Remote/hybrid work support remains a priority with 85% of companies maintaining hybrid models
Signs Your IT Budget May Be Insufficient
- Frequent downtime or system outages
- Employees using personal devices or shadow IT
- Outdated software with known vulnerabilities
- Slow systems that impact productivity
- No disaster recovery capability
- Compliance gaps or audit failures
TechNet New England offers IT assessments that help businesses understand their current technology state and develop appropriate budgets.
Sources: Deloitte Technology Investment Research, Gartner IT Spending Forecasts, Splunk 2026 IT Spending Trends