Do you feel like your current phone system ties you to your desk?
Maybe you’re always on the move — checking inventory, meeting customers, or working with contractors. Or maybe you’re missing important phone calls at your project sites. It’s time to get a phone system that can move with you, like a Voice over Internet Protocol phone system. But how much does VoIP cost?
In this guide, you’ll find a clear breakdown of pricing across different providers. You’ll also learn about key cost factors like hidden fees so you can make the best decision for your business.
How much does VoIP cost?
A VoIP phone system typically costs between $15 to $40 per user per month, with pricing on the higher side for enterprise and more customized VoIP solutions.
Here’s a detailed breakdown of how VoIP cost compares to on-premises PBX:
| Cost category | VoIP system | On-premises PBX |
|---|---|---|
| Initial setup fees | Often free or minimal | $500-$1,000 per user — includes server hardware, installation, and configuration |
| Monthly price per user | $15-$40 per user | $70+ per user for maintenance, support, and licenses |
| Phones and other hardware | Optional: $50-$500 per phone | $150+ per desk phone, plus $1,000+ server, $1,000+ telephony cards, network switches, and cabling |
| Software licenses | Included in monthly price | $4,000+ per year |
| Maintenance and IT support | Included in monthly price | $1,400+ per month for 20 users — includes dedicated IT staff, repairs, and system management |
| Feature upgrades | Included or minimal add-on fees — $5-$15 per feature | Additional costs for major version upgrades and new hardware |
| International calling | Minutes often included for US/Canada; low per-minute rates internationally | $0.05-$0.50 per minute on traditional lines |
| Two-year total cost estimate | $16,400 for 20 users | ~$48,000 for 20 users over 2 years |
And here’s a real-life example. Let’s say your team of five uses Quo, formerly OpenPhone, as your VoIP phone system.
For a separate VoIP number for each user, a main office number, and free calls and texts to US and Canadian numbers, your total upfront cost is between $81.50 and $83 per month and a one-time US carrier registration fee of $19.
Plus, Quo works on your existing devices, so no additional hardware is required.
That’s nothing compared to what an on-premise PBX phone system costs to provide the same functions. For a traditional telephony system with five phone lines, companies pay an average of over $4,000 just for installation and maintenance.
Breakdown of VoIP costs
Your total VoIP costs can vary depending on factors like:
- The number of users
- How many phone numbers your business needs
- Whether your provider changes based on usage, like VoIP call minutes or additional extensions
- Monthly or annual payment plans
- Features included in each plan
- Optional hardware, like VoIP headsets or desk phones.
To make it easy, we’ve categorized VoIP software cost factors into four categories: one-time costs, recurring costs, add-ons, and taxes:
Upfront one-time costs
Switching to a virtual phone system involves minimal upfront costs compared to traditional phone systems. Here are the main one-time expenses to consider:
- US carrier registration: As of August 2023, any business that calls or sends messages to US numbers through a cloud-based phone provider must register to be approved as a US carrier. This requires a one-time $19 fee.
- Number porting: If you want to keep your current phone number, ask your potential provider whether they charge to port your number to their system. Quo doesn’t charge for this, but it can cost up to $30 per number, depending on the VoIP service.
- Optional hardware: With VoIP providers like Quo, you can use any smart device you already own — like a computer, tablet, or mobile device. But if you prefer dedicated hardware, you might invest in a VoIP headset or a desk phone.
🥴 Unlike VoIP, traditional landlines come with many upfront expenses, including software, server hardware, desk phones, and associated installation costs.
You’ll also end up spending thousands of dollars on maintenance, repair, ongoing IT support, and opening additional offices. Finally, adding more lines requires copper wiring, which can lead to significant extra costs if you expand or relocate.
Recurring costs
VoIP cost comparison calculator
Cloud phone systems have fixed monthly costs, which can vary depending on your provider and the features you need. Here’s what you should keep in mind:
- Subscription plans: The bulk of your recurring costs from VoIP providers are annual or monthly subscriptions. Quo’s basic plan starts at $15 per user per month paid annually. We offer unlimited calling and texting in the US and Canada. You also get free softphone functionality, voicemail-to-text transcription, call recordings, and integrations with tools like Slack and Zapier. Other providers may charge more for advanced features or international coverage.
- Scalability and upgrade costs: You might incur costs if you need to upgrade your internet plan or add numbers as your team grows. On Quo, each user on your plan includes one unique US, Canadian, or toll-free number; any extra numbers are $5 per number.
- International calling: Most providers offer competitive rates for international phone calls, but these are often billed separately. Quo offers low international calling rates for a small additional fee, depending on the destination.
- International texting: Most providers charge per message for international SMS — typically $0.05-$0.50 depending on the country. If your business frequently texts internationally, ask about bundled messaging plans to reduce costs.
- Minute-plans: If your provider bills based on call minutes, look for plans with free calling to US and Canadian numbers or packages that suit your team’s needs. Otherwise, overages can add up quickly.
- Monthly messaging fee: The Campaign Registry charges a monthly fee of $1.50-$3.00, depending on your use case, to help you maintain good standing with the large US cell carriers.
- Low Volume Standard: $1.50 per month for businesses with an Employer Identification Number or EIN that send fewer than 6,000 SMS and MMS messages per day
- Sole Proprietor: $2 per month for businesses without an EIN or equivalent business tax ID.
- Non-profit organizations: $3 per month for non-profit businesses
VoIP service add-ons
Most VoIP providers offer additional features like international calling, integrations, auto-attendants, call forwarding and call routing, and premium customer support.
These functions can enhance your service. But if they’re not included in the base plans, they can quickly add to your VoIP phone system costs.
When choosing a VoIP provider, consider how much of what you need is included in the base plan. A lower-priced plan may seem like it’s cost-saving for you, but could end up costing more if essential features are only available as add-ons.
For example, Quo offers add-ons like automated messages via Zapier, Make, and the Quo API, and extra phone numbers. But almost everything else a small business might need is covered in our plans.
Taxes
Nothing is certain except death and taxes. These can be federal, state, or local taxes, along with government-mandated fees and surcharges.
The exact amount you’ll pay will depend on your service location. But according to recent data, the average combined tax, fee, and surcharge rate on taxable voice services is 26.8%, ranging from 16.1% in Idaho to 36% in Illinois.
Check with your VoIP provider or local tax authorities for the most accurate information.
Five VoIP phone services: a cost comparison
Here’s a VoIP pricing breakdown for some of the best VoIP services out there:
| Provider | Starting price | Free trial | Best for |
|---|---|---|---|
| OpenPhone | $15 per user per month | ✅ | Simple, reliable, and collaborative phone system |
| Dialpad | $15 per user per month | ✅ | Extensive AI features for call centers |
| Vonage | $19.99 per number per month for teams up to 4 people | Includes free trial credits | Platform with several APIs |
| RingCentral | $20 per user per month for teams up to 5 people | ✅ | Desk phone rentals |
| Nextiva | $15 per user per month | ❌ | Video conferencing |
💡 Compare business phone system costs with Quo’s VoIP cost comparison calculator
Before deciding on a business VoIP solution, look carefully into their contract terms. Many providers have long-term contracts — think up to 36-month agreements — which can become costly if your needs change.
Even if you can afford your current plan, some providers might force you into a higher-tier plan with a steep price jump as you grow.
So choose a provider with scalable, flexible plans or shorter commitments to avoid unnecessary expenses.
Other hidden expenses and realities that impact your overall VoIP cost include:
- Cancellation fees: Unlike Quo, some VoIP providers charge a fee if you cancel your service before the end of your contract. Others may waive the cancellation penalties if you opt for a monthly payment plan, but that’s usually more expensive than paying annually.
- Auto-renewals: Many businesses get locked into a renewed contract. They’re forced to pay subscription fees for another term because they didn’t realize their plan auto-renews. Always check renewal terms to avoid surprise charges.
- Usage restrictions: Some VoIP providers have limits on domestic calling minutes, call transcription hours, or SMS volume. Exceeding these caps can trigger overage fees. Try to avoid providers with these limits — especially if you get a high volume of calls and texts.
- Texting registration: Beyond the monthly Campaign Registry fee, there’s typically a one-time registration fee of $4-$15 to verify your business with US carriers. This regulatory requirement can take 1-2 weeks for approval, which may delay your ability to text customers. Quo streamlines this process with guided setup to get you registered and texting faster.
Is switching to VoIP worth it for small businesses?
VoIP is a great solution for small businesses because it’s cost-effective, scalable, and packed with advanced features that help teams work smarter. Here’s a closer look:
Cost-effective from day one
Switching to VoIP means you don’t pay expensive hardware installations and maintenance fees. With regular monthly pricing and no surprise charges, you can budget confidently. Plus, you’ll get access to VoIP features that would cost thousands more with legacy systems. These include call recording, real-time analytics, automated messaging, and third-party integrations.
Better productivity and customer experience
With VoIP, your team can handle calls and messages together through shared numbers and inboxes. This reduces missed calls and ensures nothing slips through the cracks.
Lightweight CRM features like contact notes let you track customer interactions and information directly in your phone system. This saves your team time and helps them follow up with confidence.
Modern providers like Quo also offer AI call management features that keep conversations organized. For example, you can reference AI-generated call summaries and next steps after each call. Smart call tagging helps you spot problems before they escalate.
Enhanced operational efficiency
Other features that save your team hours of time include:
- Automated texting: Address customer requests and FAQs faster with pre-written templates and scheduled messages.
- Call recordings and voicemail transcription: Review past conversations or skim voicemails to ensure no details are missed.
- Automations and scheduling: Save time by automating repetitive tasks like sending auto-replies or scheduling payment reminders.
Easier to scale
You can get your team up and running without needing IT support, costly up-front installations, or hours of training. Unlike traditional landlines, your team can take calls or messages on the go using any device. And because it’s easy to set up and scale, it grows with your business — whether you’re adding a single line or an entire team.
VoIP phone systems are also highly secure, with the best providers encrypting your business communications and data to keep it safe. It’s an extra level of added security you won’t have with traditional landlines or cellular networks.
Get the most value for your business with Quo
Switching to VoIP small business phone systems offers you more than just a way to make calls. It’s a cost effective way to get a solution built for flexibility, scalability, and modern business needs.
Our plans start at $15 per user per month, paid annually — and you won’t be forced to upgrade to a higher-tier plan just because your team expands.
Check out Quo’s pricing page to find the plan that’s right for your business.
FAQs
For most small businesses, an average broadband plan is enough. However, if you have a larger team or experience slow speeds, you may need to upgrade to ensure high call quality.
According to the Federal Communications Commission, you should have a minimum of 0.5 Mbps download speed for VoIP to function smoothly. Try a VoIP speed test to see if you need an upgrade.
In most cases, yes. VoIP eliminates many upfront and ongoing costs associated with traditional phone systems, like installation, maintenance, and copper wiring.
With Quo, for example, you can get started with $81.50-$83 per month for a team of five, along with a one-time US carrier registration fee of $19 — making it a cost-effective choice for small businesses.
VoIP providers bill the same way many other service providers do: a bill that can be paid online through your customer portal. You’ll usually add your payment information when you sign up. Your payment will be automatically deducted from your account each month or year, depending on your preference.
Quo is the most affordable VoIP solution for small businesses because it offers a full-featured phone system, with VoIP plans starting at $15 per user per month, including:
– One new local or toll-free phone number per user
– Free calls and messages to US and Canadian numbers
– Team collaboration tools like shared phone numbers, internal threads, pre-written text message templates, and inbox viewers!
– Call management features to manage your incoming call volume, including simultaneous ring and ring groups, IVR phone menus, and backup call forwarding options
– Thousands of integrations that help businesses stay efficient
VoIP services require an Internet connection to use them, so you might face challenges with calling customers in areas with spotty data coverage. However, compared to traditional landlines, hosted VoIP is far easier to scale, more flexible, and doesn’t require expensive wiring or maintenance. That’s why it’s a practical choice for most businesses.
Free VoIP services do exist — like Google Voice or Microsoft Teams — but they come with limitations. For example, you can only text in the US with Voice and team chat with other Teams users. This makes them best for solopreneurs or basic internal team communication.
Cloud-based VoIP systems like Quo can be set up in minutes to hours. In comparison, traditional on-premises PBX installations typically take 10-12 weeks from agreement signing to full implementation.
