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What Percentage of IT Budget Should Go to Cybersecurity?

Industry benchmark: 10-15% of IT budget for most organisations. Regulated industries: 15-18%. SMBs now averaging 14.8%. Global cybersecurity spending: $240 billion in 2026.

10-15%

Best Practice

Of IT budget for most orgs

15-18%

Regulated Industries

Financial services, healthcare

14.8%

SMB Average 2026

Up from 10.2% in 2022

$240B

Global Security Spend

2026, up 12.5% YoY

Cybersecurity Budget Calculator

Enter your total IT budget to see the recommended security allocation.

$

Recommended Cybersecurity Budget (General (most industries))

$50,000

Minimum (10%)

$62,500

Recommended (13%)

$75,000

Best Practice (15%)

How to Allocate a Cybersecurity Budget

Security Category% of Security BudgetExamples
Software and Platforms40%EDR/XDR, SIEM, WAF, identity and access management, DLP
Personnel30%CISO, security analysts, SOC team, or MDR service retainer
Hardware15%Firewalls, network appliances, hardware tokens
Outsourced Services15%Penetration testing, incident response retainer, security awareness training

Cybersecurity Budget Benchmarks by Industry

IndustrySecurity as % of IT BudgetKey Drivers
Financial Services15-18%PCI-DSS, SOX, GDPR, high fraud risk, regulatory scrutiny
Healthcare15-18%HIPAA, patient data sensitivity, ransomware targeting
Government/Public Sector15-20%National security requirements, NIST frameworks
Technology/SaaS12-16%Customer data responsibility, SOC 2 compliance, developer security
Professional Services12-15%Client confidentiality, email threat exposure
E-commerce/Retail10-14%Payment card data, PCI-DSS, customer data breaches
Manufacturing8-12%OT/IT security, supply chain risk, IP protection
SMB (all industries)12-15%Ransomware targeting, cyber insurance requirements

The Cost of Underfunding Cybersecurity

The average data breach costs $4.45 million. For SMBs, a ransomware incident averages $1.5-$2.5 million in total impact including downtime, recovery, and reputational damage. Investing 12-15% of IT budget in security typically costs $30,000-$150,000 per year for an SMB - a 10-50x better use of money than post-incident remediation.

Calculate your breach exposure at databreachcost.com →

Full IT Budget Breakdown

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Frequently Asked Questions

What percentage of IT budget should go to cybersecurity?
Industry best practice is 10-15% of total IT budget for most organisations. Regulated industries such as financial services, healthcare, and government should target 15-18% to meet compliance requirements. SMBs are now averaging 14.8% of IT budget on security in 2026, up from 10.2% in 2022, driven by ransomware threats and cyber insurance requirements. If your security spend is below 10%, you are likely exposed to risks that would cost far more to remediate after an incident.
How should a cybersecurity budget be broken down?
A well-structured cybersecurity budget allocates approximately: 40% to software and platforms (EDR, SIEM, WAF, identity management), 30% to personnel (security analysts, CISO, SOC team or outsourced MDR), 15% to hardware (firewalls, network appliances), and 15% to outsourced services (penetration testing, incident response retainer, security awareness training). The exact split shifts based on whether you run an in-house SOC or outsource to a managed detection and response provider.
Is global cybersecurity spending increasing?
Yes. Global cybersecurity spending is $240 billion in 2026, up 12.5% year-over-year. This is the seventh consecutive year of double-digit growth in the category. The growth is driven by rising threat levels (ransomware, supply chain attacks, nation-state activity), stricter regulatory requirements (DORA, NIS2 in Europe, SEC rules in the US), and the expanding attack surface created by cloud adoption and remote work infrastructure.
What happens to security budgets after a breach?
Post-incident, security budgets typically increase by 30-60% as organisations address root cause vulnerabilities and satisfy insurance and regulatory requirements. According to data breach cost studies, the average total cost of a breach is $4.45 million (IBM, 2023), compared to the cost of a basic security programme of $50,000-$150,000 per year for an SMB. Investing proactively in security delivers a 20-40x return on investment compared to post-incident remediation.