How Do MSPs Price Their Services?

The Pricing Models MSPs Actually Use

Most MSPs sell managed services as a fixed monthly fee, and the argument is only about what the fee counts. Kaseya's 2023 Global MSP Benchmark Survey, with 1,091 respondents, found no single model dominant: a mix of per-user and per-device pricing was the most common answer, followed by a pure per-user seat. The recurring fee is what builds monthly recurring revenue, and it is the number a buyer or lender will look at first when they value the business.

The survey also recorded per-device pricing falling to 13% of respondents from 17% the year before. The reason is easy to see: a client who issues staff a laptop, a phone and a tablet does not want a bill that triples because they bought better equipment, and a per-device price makes the MSP look like it is taxing the purchase.

Per User or Per Device: How to Choose

Per-user pricing, often called an all-in seat price, is easier to sell because it matches how the client thinks about their business: people. It also moves with headcount, so a growing client pays more without a renegotiation. The risk is the heavy user with six devices and a habit of calling the help desk, who costs far more to support than the seat price assumes.

Per-device pricing is easier to count and audit because your RMM already lists every agent. It suits manufacturing floors, clinics with shared workstations and anywhere machines run without a named user. Most MSPs land on a hybrid for exactly this reason: a seat price for people, and a separate line for servers, network gear and shared devices that nobody owns.

Whichever you choose, count it the same way every month. Pull the user or device list from your RMM or identity platform rather than from the client's memory, and bill true-ups on a fixed schedule written into the agreement. Disputes about headcount are almost always disputes about a list nobody reconciled, and they are much easier to avoid than to settle after a client has been billed for people who left.

• Choose per user when most staff have their own devices and the client budgets by headcount.
• Choose per device when machines outnumber people or run unattended on a shop floor.
• Choose a hybrid when the client has both, and price the infrastructure separately so it does not hide inside the seat.
• Avoid a single flat fee unless you have a reliable way to reprice it when headcount or scope moves.

What Belongs Inside the Price and What Sits Outside

The model matters less than the boundary around it. Every agreement leaves some work outside the monthly fee, and the MSPs that stay profitable wrote that boundary into the contract before the first invoice rather than discovering it during a dispute. An all you can eat agreement is only safe when the scope around it is written down just as carefully.

• Project work: migrations, new sites, office moves and major upgrades, quoted separately.
• Hardware and software resale: billed at cost plus a markup, never folded into the seat.
• Onboarding: a one-time fee that pays for documentation, cleanup and tool deployment.
• After-hours and emergency work outside the agreed service hours in your SLA.
• Support for line-of-business applications the client chose without you, beyond basic triage.

Billing these separately is not just tidiness, because the margins are different. Service Leadership's Q2 2024 data put the average managed service gross margin at 46.2%, product margin at 26.3% and project margin at 19.4%. Blend them into one fee and a single hardware refresh can make a healthy account look like a loss, or hide a real one.

Onboarding deserves particular care. The first weeks of a new agreement carry the most work, from documenting the environment to replacing tools and cleaning up accounts, and a fee that starts on day one at the normal seat price leaves that work unpaid. The Client Onboarding Checklist lists what the work usually includes, which is a useful basis for quoting the onboarding fee.

Building the Number From Your Own Costs

A seat price copied from a competitor tells you what they charge, not what you need. Start from your cost to deliver one seat: technician time per user per month, the per-seat cost of your security and backup stack, and a share of the service desk. Then set the price so that managed services gross margin lands where you want it once all of that is counted.

The Managed Services Pricing Calculator walks through that build, and the Client Margin Calculator checks it against each account after a few months of real tickets. Watch your effective hourly rate per client as well: when it drops well below your project rate, the seat price is too low for how that client actually uses you.

Tiers and Bundles Without the Confusion

Tiered bundles let a client start small and move up, and they give an account manager something concrete to sell at each renewal. They fail when the tiers differ by dozens of line items nobody can remember. Keep the difference between tiers to a few things a client can feel, such as response time, security coverage and planning time.

Security is the usual dividing line between tiers now. If a lower tier leaves out tools you believe every client needs, such as EDR or tested backups, decide whether you are willing to support a client who declines them, and put that decision in the agreement.

Whatever the tiers contain, make the upgrade path easy. A client who outgrows Essentials should be able to move up at the next billing cycle without a new contract, and your account manager should know which signals, such as a compliance requirement or a new office, suggest it is time to raise the conversation.

Reviewing and Raising Prices

A price set at signing drifts out of date as vendor costs and wages rise. Review every agreement at renewal against its actual margin, not against the original quote. The Renewal Cost Worksheet lays out the comparison, and Raising Prices Without Losing Clients covers how to deliver the news.

Use the review to check whether the client still fits the model you sold. A client who has doubled its device count on a per-user agreement, or moved most of its work to the cloud on a per-device one, may be better served by a different structure, and changing it at renewal is far easier than mid-term.

Build an annual adjustment clause into new agreements so an increase is expected rather than negotiated from scratch. When a larger change is needed, a plain letter explaining what changed and when is usually enough; the Price Increase Letter is a starting point you can adapt.

Common Pricing Mistakes

• Pricing the first client to win it, then applying the same number to every client after.
• Leaving onboarding free, so the first three months of an agreement run at a loss.
• Including unlimited onsite visits for clients spread across a wide area.
• Passing vendor price increases through a year late, after they have already eaten the margin.
• Tracking one blended margin, so it is impossible to tell which clients or services are underwater.

None of these is fixed by switching models. They are fixed by knowing what each seat costs, writing down what the fee covers, and checking both every year.