MSP vs In-House IT: Cost Comparison for a 25-Person NY/NJ Business

The question comes up in every first conversation we have with a new prospect: should we just hire someone? Below is the math we walk founders, owners, and CFOs through, with NY/NJ market rates for a 25-person business.

The naive comparison

The internal-vs-MSP comparison usually starts as a salary question. “An IT generalist is $85K. An MSP is $30K a year. Done.”

The salary number is roughly right (a junior-to-mid IT generalist in the NY/NJ market is currently in the $75K–$100K range, before benefits). The MSP number is also roughly right for a 25-person business at a mid-tier security plan. But neither captures the actual cost.

What an internal IT hire actually costs

Direct compensation:

• Base salary: $85,000
• Benefits, taxes, payroll loading (typical multiplier 1.25–1.30): $21,250
• All-in compensation: ~$106,250

Tooling that the role requires:

• RMM / patch management platform: $15–$25 per endpoint per month → $9,000/year for 30 endpoints
• Antivirus / EDR: $4–$8 per endpoint per month → $2,400/year
• Backup software + storage: $3,500–$6,000/year for typical SMB
• M365 / Google Workspace administration time: included in salary, but requires the right licensing tier
• PSA / ticketing system (so the work is tracked): $1,200/year
• Documentation platform (IT Glue, Hudu, or similar): $1,800/year
• Tooling: ~$18,000/year

What you don’t get:

• Coverage when your one IT person is on PTO, out sick, or in an interview process to leave
• 24/7 emergency response (you need at least 2.5 FTEs to cover after-hours, weekends, and holidays)
• Tier 2/3 expertise across networking, M365, Azure, AWS, security, VoIP, cabling, compliance — your $85K hire is good at one or two of these, not all of them
• Vendor management leverage — your single IT person calls Verizon, Microsoft, or your line-of-business app vendor with no special access
• Strategic IT planning — your one person is too busy putting out fires
• Ongoing security posture — keeping up with cyber insurance carrier requirements is a job by itself

Realistic all-in for a single internal IT hire: ~$125,000/year, and you still have visible gaps.

What a mid-tier MSP costs for the same business

Using our Secure tier pricing as a reference for managed IT (similar to most NY/NJ MSPs):

• 25 workstations × $159/month = $47,700/year
• 1 server × $250/month = $3,000/year (typical SMB has 0–2 servers)
• Network infrastructure (firewall, switches, APs) management: $200/month = $2,400/year
• 24/7 SOC monitoring: included
• EDR, MFA, phishing training, immutable backup: included
• M365 administration: included
• Annual managed-services spend: ~$53,000

What’s also included that you would pay extra for in-house:

• A team of engineers across networking, M365, Azure, AWS, security, VoIP, cabling, compliance
• 24/7 emergency response
• After-hours patching and maintenance windows
• Quarterly business reviews
• Vendor management leverage

What’s not included (you pay separately, but transparently):

• Hardware purchases
• Software licenses (M365, line-of-business apps)
• Major projects (server replacement, office relocation, M365 migration, structured cabling)
• Onsite time beyond what your tier includes

The real comparison

	Internal IT hire	Mid-tier MSP
Annual cost	~$125,000	~$46,000
24/7 coverage	No (or +$200K+ for shifts)	Yes
Skill breadth	One person’s expertise	Whole-team expertise
Tooling included	Separate purchase	Included
Strategic planning	Often skipped	Quarterly built-in
Cyber insurance fit	Variable	Designed in
Coverage during PTO	None	Continuous

When in-house actually makes sense

Internal IT hires start to make economic sense around 75–100+ employees, or when the business has highly specialized needs that an MSP would have to learn from scratch. The hybrid model — internal IT person plus a co-managed MSP relationship — is often the best fit at 50–150 employees. The internal person owns user-facing work, vendor relationships, and project management; the MSP provides tooling, after-hours coverage, security operations, and tier-3 escalation.

The honest answer

For a typical 25-person NY/NJ business, the MSP path is roughly $80,000/year less expensive than a single internal hire, with broader skill coverage, 24/7 response, and built-in tooling. The math shifts as the business grows — and we will tell you when it does.

Related services

• Managed IT — fully-managed IT for businesses that want to outsource the entire function
• Co-Managed IT — tooling, 24/7 SOC, after-hours, and tier-3 escalation behind your existing IT person

If you want a written comparison customized to your business, book a 30-minute call. Free, no slide deck, no obligation.