Average IT Budget: How Much Should a Company Spend on IT?

The average IT budget is 5.7% of revenue in 2026, ranging from 2% to 10% depending on industry and company size. Here is what a typical IT budget looks like in dollars, and how much a company should spend.

Average IT Budget as % of Revenue (2026)

5.7%

Across all industries and company sizes. Most companies fall between 2% and 10%. Source: Gartner, IDC 2026.

What is the average IT budget for a company?

The average IT budget is 5.7% of annual revenue in 2026. In dollars it scales with revenue, so the average IT budget by company revenue is roughly:

~$570K

$10M revenue

~$2.85M

$50M revenue

~$5.7M

$100M revenue

~$28.5M

$500M revenue

Figures apply the 5.7% cross-industry average to each revenue point. Your exact figure depends on industry and size: see the by industry and by company size breakdowns, or run the calculator for a tailored number.

Source: Avasant Computer Economics IT Spending & Staffing Benchmarks, Gartner IT Key Metrics Data, and IDC Worldwide IT Spending Guides; cross-referenced with Spiceworks Ziff Davis State of IT. Ranges compiled and verified June 2026. Full methodology and source list.

How much should a company spend on IT?

A healthy range is 4-8% of revenue, centred on the 5.7% cross-industry average. Below 3% usually signals underinvestment, particularly in security and cloud infrastructure. Above 12% points to either inefficiency or a digitally intensive business model such as pure-play SaaS or fintech.

Three factors move the right number for your business: industry (financial services 7-10%, manufacturing 2-5%), company size (smaller firms spend a higher percentage), and growth stage (rapid scaling needs ahead-of-curve investment). Start from your industry benchmark, then adjust.

Average IT Budget by Company Revenue

Annual Revenue	Typical IT Spend %	Average IT Budget	Key Characteristics
$1M-$10M	6-10%	$60K-$1M	SaaS-first, minimal team, MSP likely needed
$10M-$50M	5-8%	$500K-$4M	First IT hires, security catch-up phase
$50M-$250M	5-7%	$2.5M-$17.5M	IT governance forming, FinOps starting
$250M-$1B	4-6%	$10M-$60M	Enterprise tooling, digital transformation
$1B+	3-5%	$30M+	Scale economics, AI investment wave

Average IT Budget by Company Size

The average IT budget percentage falls as a company grows, because fixed infrastructure and licensing costs spread across more revenue. Startups run the highest ratio; large enterprises the lowest.

Company Size	Average IT Spend (% of revenue)	Why
Startup (1-50 employees)	6.9% avg	Highest ratio: fixed SaaS and security costs spread over little revenue
SMB (51-250 employees)	4-7%	First dedicated IT hires or an MSP contract; security catch-up
Mid-market (251-1,000 employees)	6-8%	IT governance and FinOps forming; digital transformation spend
Enterprise (1,001-5,000 employees)	4-6%	Enterprise platforms and compliance tooling at scale
Large Enterprise (5,000+ employees)	3.7% avg	Lowest ratio: economies of scale on infrastructure and licensing

IT Budget as % of Revenue

The ratio metric in depth, by revenue band and what moves it up or down.

IT Budget by Industry

Industry-specific benchmarks from 2% to 10% of revenue.

Average IT Spend Per Employee

$9,000 to $14,000 per employee. Full per-FTE map by size and industry.

Frequently Asked Questions

What is the average IT budget for a company?

The average IT budget is 5.7% of annual revenue across all industries and company sizes in 2026. In dollars this scales with revenue: a company with $10M revenue spends roughly $570,000 on IT at the average, a $50M company about $2.85M, and a $100M company about $5.7M. Most companies fall between 2% and 10% of revenue, driven mainly by industry and company size. These benchmarks are compiled from Gartner IT Key Metrics Data, Avasant Computer Economics, and IDC.

How much should a company spend on IT?

A company should budget 4-8% of revenue on IT as a healthy range, centred on the 5.7% cross-industry average for 2026. Below 3% often signals underinvestment in security and cloud; above 12% usually means either inefficiency or a digitally intensive business model such as SaaS or fintech. The right figure depends on your industry (financial services 7-10%, manufacturing 2-5%), your company size (smaller firms spend a higher percentage), and your growth stage.

What is the average IT budget as a percentage of revenue?

The average IT budget is 5.7% of revenue in 2026. By company size, startups average 6.9%, SMBs 4-7%, mid-market firms 6-8%, enterprises 4-6%, and large enterprises 3.7%. The percentage generally falls as a company grows because fixed infrastructure and licensing costs are spread across more revenue. By industry the spread runs from financial services at 7-10% down to non-profits at 2-4%.

How much do companies spend on IT on average per employee?

The average IT spend per employee is roughly $9,000 to $14,000 per year across all company sizes and industries, with a mid-point near $11,500. Lean SaaS-first startups run $1,800 to $4,000 per employee, while mid-market and enterprise firms reach $9,000 to $15,000 as dedicated security teams and enterprise platforms scale up. Financial services and technology run highest at $14,000 to $25,000; manufacturing and non-profits lowest at $3,000 to $7,000.

What is a typical IT budget for a small business?

A small business with 1-49 employees typically spends 6.9% of revenue on IT. A 20-person company with about $3M in revenue would budget roughly $150,000 to $207,000 a year, or about $7,500 to $10,500 per employee. Very small, early-stage teams on lean SaaS-only stacks can run as low as $1,800 to $4,000 per employee. Cloud-first tools and managed services help small businesses reach enterprise-grade IT without a full-time team.

Why does the average IT budget percentage fall as companies grow?

Because of economies of scale. Fixed costs such as core infrastructure, software licences, minimum seat counts, and a baseline security stack are spread across more revenue as a company grows. A 10-person firm might spend 10% of revenue on IT; the same business at 500 people might spend 5%. Large enterprises sometimes see the percentage stabilise or rise temporarily during digital transformation or major compliance programmes.

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