How Much Do Companies Spend on SaaS Per Employee? (2025)

How Much Do Companies Spend on SaaS Per Employee? (2025)

Research Highlights:

  • Average SaaS spend per employee has risen to $4,830 in 2025, up 21.9% year-on-year (1). This is the first increase in spend in 3 years, resulting largely from increased AI adoption and vendor costs
  • IT and healthcare companies have the highest SaaS spend per employee, exceeding $10,000, while finance and retail spend between $7,750 and $8,750 (2).
  • Private SaaS companies themselves are operating at a median $129,724 annual recurring revenue (ARR) per employee, a key efficiency benchmark (3).

1. Global SaaS Spend Trends

Global SaaS budgets continue to grow, with companies allocating more of their IT spend to subscriptions. Zylo’s 2025 report (1), analysing 40 million licences across $40B in SaaS spend, found:

  • $4,830 average SaaS spend per employee in 2025 (up from $3,960 in 2024).
  • Companies now manage an average of 275 SaaS applications.

2. SaaS Spend Per Employee by Sector

SaaS spend per employee varies widely across industries. While the global average sits at $4,830 per employee in 2025 (1), some sectors spend more than double this amount because of their reliance on complex and data-heavy software.

Sector Breakdown

Analysis by Vertice (2) for Q1 2025 shows clear variation by sector:

  • Healthcare: $10,150 per employee
  • IT / Software companies: $10,050 per employee
  • Finance and Professional Services: $8,750 per employee
  • Retail and Consumer Goods: $7,750 per employee
  • Media and Entertainment: $3,250 per employee

These figures highlight that healthcare and IT lead in SaaS investment due to the need for secure, specialist tools. Finance and retail remain above the global average but are more selective, while media and entertainment companies spend less as they rely on fewer specialised platforms.

Company Size Influence

Spending also varies depending on company size (2):

  • Enterprises (10,000+ employees): Around 28% increase in per-employee spend since 2024.
  • Mid-market (500–10,000 employees): The steepest growth, with per-employee spend up by around 40%.
  • SMBs (under 500 employees): Per-employee spend up by 21% year-on-year.

Sectors Below the Global Average

While Vertice highlights the industries with the largest SaaS budgets, other studies show that sectors such as education, telecommunications, utilities and manufacturing often spend between $3,000 and $5,500 per employee, placing them below the global average (1)(2).

3. ARR per Employee: Benchmarking SaaS Company Efficiency

For SaaS companies, ARR per employee is a key measure of operational efficiency. SaaS Capital’s 2025 (3) dataset shows:

  • Median ARR per employee: $129,724
  • Firms with $20–50M ARR achieve the highest efficiency (~$175K per employee).
  • Firms with $1–3M ARR average ~$99,858, with bootstrapped companies typically more efficient ($110K) than equity-backed ones ($94K).

Additional benchmarks (5)(6):

ARR Range Median ARR per Employee
< $1M ~$71,429
$1–5M ~$120,000
$5–20M ~$151,515
$20–50M ~$175,000
> $50M ~$164,439

This measure of ARR per employee highlights the balance between growth and efficiency as companies mature. Early-stage SaaS businesses tend to hire ahead of revenue, while mid-stage companies become more disciplined as they scale.

4. Growth and Retention Metrics

  • Public SaaS growth: Median ~30% (2024), with vertical SaaS firms slightly outperforming horizontal peers (31% vs 28%) (4).
  • Private SaaS growth: Median ~26%, with top performers approaching 50%. Net revenue retention across private B2B SaaS firms stands at 101% (5).

5. Key Challenges Ahead

As SaaS adoption grows, companies are facing new problems in managing such a large number of applications. What was once a simpler IT environment has now become complex, fragmented and costly to oversee.

Some of the main challenges include:

  • Shadow IT – Teams and individuals often sign up for new tools without going through procurement or IT. While this speeds up decision-making, it leads to hidden costs, duplicate contracts, and security risks.
  • Tool overlap – It’s increasingly common for different departments to use separate tools that do the same job, simply because they purchased them independently. This duplication can be hard to spot and expensive to fix.
  • Cost visibility – With hundreds of apps in use, tracking exactly how much is being spent across the business has become more difficult. Many companies underestimate their true SaaS spend.
  • Security and compliance – The more tools in use, the harder it becomes to maintain a consistent security standard, manage access controls, and ensure compliance with regulations.

In response to these issues, many companies are adopting SaaS Management Platforms (SMPs). These tools bring all SaaS contracts, usage data, and costs into a single dashboard, making it easier to manage renewals, reduce waste, and ensure policies are followed.

What’s Next for SaaS Spend?

Looking ahead, SaaS spend is expected to keep rising over the next five years. Although there is a push to rationalise software portfolios, several trends suggest spending per employee will still increase:

  • Consolidation of vendors – Larger companies will continue to merge and bundle services to reduce complexity. However, this won’t stop teams from seeking out best-of-breed apps for specific tasks.
  • Growth of specialised apps – Even as consolidation happens, there is strong demand for niche tools that meet very specific business needs, particularly in industries with complex workflows.
  • AI-driven monitoring and optimisation – Artificial intelligence will play a growing role in tracking licence usage, identifying underused tools, and suggesting ways to cut unnecessary costs.
  • Focus on value over price – Businesses are becoming more willing to pay a premium for tools that help them be more productive, automate work, or deliver better customer experiences.

Overall, SaaS budgets are expected to continue rising, particularly in knowledge-heavy sectors such as technology, healthcare and professional services, where the reliance on digital tools is strongest.

Sources

  1. Zylo – 2025 SaaS Management Index: https://zylo.com/news/2025-saas-management-index/
  2. Vertice – SaaS Spend Per Employee: https://www.vertice.one/blog/saas-spend-per-employee
  3. SaaS Capital – Revenue per Employee Benchmarks: https://www.saas-capital.com/blog-posts/revenue-per-employee-benchmarks-for-private-saas-companies/
  4. Vena Solutions – SaaS Statistics: https://www.venasolutions.com/blog/saas-statistics
  5. Benchmarkit.ai – 2025 Benchmarks: https://www.benchmarkit.ai/2025benchmarks
  6. InvGate – SaaS Benchmarks: https://blog.invgate.com/saas-spending-benchmarks