In-House IT vs. Outsourced IT — True Cost for 20–50 People
Somewhere between 20 and 50 employees, every business owner has the same debate: hire our own IT person, or outsource it? The salary comparison most people run is incomplete — this article walks through the true math, including the costs that don't show up on a job posting.
The short answer: for most 20–50 person companies, outsourced managed IT delivers more coverage for the same or less money than one in-house hire. A fully loaded IT generalist costs $85,000–$120,000 per year and covers one person's business hours. Managed IT for the same company at market rates typically runs $40,000–$90,000 per year with a team, 24/7 monitoring, and enterprise security tooling included.
What Does an In-House IT Hire Really Cost?
The real cost of an internal IT employee is 30–45% above their base salary once you count everything. Sacramento-area IT generalist salaries run $65,000–$95,000; the fully loaded figure — taxes, benefits, PTO, training, and the software stack they need to do the job — lands at $85,000–$120,000 per year.
| Cost item | Typical annual amount |
|---|---|
| Base salary (Sacramento IT generalist) | $65,000–$95,000 |
| Payroll taxes and workers' comp | $6,000–$10,000 |
| Health benefits, retirement match | $8,000–$15,000 |
| Monitoring, ticketing, security tools | $5,000–$15,000 |
| Training and certifications | $2,000–$5,000 |
| Fully loaded total | $85,000–$120,000 |
And that buys you one set of skills, 40 hours a week, minus vacation, sick days, and the hiring gap when they leave. Industry retention data consistently shows small-company IT staff turning over every 2–4 years — they're using your business to build a resume for a larger IT department.
What Does Outsourced IT Cost for the Same Company?
At published 2026 market rates of $100–$250 per user per month, a 20-person company pays roughly $24,000–$60,000 per year and a 50-person company roughly $60,000–$150,000, with most landing well below the top of those bands. The spread depends on security scope, compliance requirements, and infrastructure complexity — cloud-first offices price lower, server-heavy or regulated businesses price higher.
What that buys, versus one hire:
- A helpdesk team instead of one person's queue — no coverage gap for lunch, vacations, or resignations
- 24/7 monitoring and alerting, which no single employee can provide
- Specialist depth: security, networking, cloud, backup — skills that rarely coexist in one generalist
- Enterprise tooling (EDR, patching, backup platforms) bundled at MSP volume pricing
- Documentation as a contractual deliverable, not tribal knowledge
See our managed IT services page for what a full agreement covers.
Where Does In-House IT Still Win?
Physical presence and deep business-specific context. If your operation needs someone walking the floor daily — a manufacturer with production equipment, a company with constant hands-on hardware needs — an on-site person delivers things a remote helpdesk can't. In-house staff also absorb non-IT tech work (AV setups, TV mounting, the CEO's home Wi-Fi) that an MSP contract won't cover.
The catch is that these strengths don't require the person to also run your security stack, patch servers, and answer every password reset. Which leads to the model that increasingly wins in this size range.
Is Co-Managed IT the Best of Both?
For companies at 30–100 employees that already have an IT person, co-managed IT usually beats both pure options. Your internal tech keeps the on-site and business-context work; the MSP adds helpdesk overflow, after-hours coverage, security tooling, and senior escalation. Costs typically run below full management because responsibility is shared.
It also fixes the single-point-of-failure problem: when your IT person takes two weeks off — or resigns — support doesn't stop. We cover the model in depth in Co-Managed IT Explained and on our co-managed IT service page.
Not sure which model fits your headcount and risk profile? Book a free IT assessment and we'll map your actual support demand against both options.
The Decision Framework
Run these four questions honestly:
- Volume: Is there 40 hours a week of genuine IT work? Under ~50 employees, almost never.
- Coverage: What happens at 6 p.m., on weekends, and during PTO? Downtime studies put outage costs at $1,000+/hour even for small firms.
- Depth: Can one person be strong at helpdesk, networking, security, and cloud simultaneously? Rarely — and security is where the gap hurts most.
- Continuity: If your IT person resigned Friday, could anyone log into everything Monday?
If those answers make you uncomfortable, outsourced or co-managed IT is the safer economics. Companies we work with across Sacramento and Elk Grove most often switch after a resignation or a security scare — it's cheaper to switch before one.