They'd grown to 14 people and decided it was time to hire IT full-time. The candidate they found was competent, personable, and willing to take $72,000 a year — which felt reasonable.
What they didn't budget for: CPP contributions, EI, benefits, two weeks vacation (plus stat holidays), the RMM and security tooling the new hire would need that the MSP they were leaving had included in their rate, and the fact that "IT support" at 14 people is not a full-time job. The new hire spent about 40% of his time doing what they'd hired him for. The other 60% was... less clear.
Eleven months in, they moved back to an MSP. The all-in annual cost of the in-house hire (salary, benefits, tooling) had been approximately $97,000. Comparable managed services coverage: $28,800 a year.
The real cost of an in-house IT hire
The salary number is only the starting point. The loaded cost of a full-time employee in Canada is typically 25–35% higher than base salary once you add:
- Employer CPP contributions (~5.7% of eligible earnings)
- Employer EI contributions (~1.4x the employee premium)
- Group benefits (health, dental, disability) — typically $3,000–$7,000/year/employee
- Vacation pay and stat holiday pay
- Recruitment cost (for a $72K role, typically $10,000–$18,000 if using a recruiter)
- Onboarding and training time
A $72,000 salary is closer to $90,000–$100,000 in total employment cost before you buy a single tool.
What doesn't come with the hire
An MSP brings a stack of tools and capabilities that an individual hire typically doesn't:
- RMM (Remote Monitoring and Management): Continuous monitoring of every device, automated patch deployment, remote access for troubleshooting. Software licences alone run $20–$40/endpoint/month.
- After-hours and on-call coverage: An individual hire works business hours. A server that fails at 11pm on a Friday is a Monday morning problem unless you pay for on-call coverage.
- Depth of expertise: A single IT person is a generalist. When you have a complex network issue, an advanced Active Directory problem, or a cybersecurity incident, you need a specialist. An MSP has specialists across disciplines.
- Coverage during absence: Vacations, sick days, and personal days leave you without IT support. An MSP doesn't take sick days.
- Security tooling: EDR, vulnerability scanning, email security, and backup management — all of which should be included in an MSP contract — need to be purchased separately for an in-house hire, then managed by them.
When in-house makes sense
In-house IT makes more sense as the team gets larger and IT workload becomes genuinely full-time. The rough threshold for most Canadian small businesses is around 50–75 employees — at that point, an in-house IT coordinator (not necessarily a senior engineer) alongside a retained MSP starts to make economic and operational sense.
Below that threshold, the economics generally favour a managed services arrangement for most small businesses, with specialist consulting for discrete projects.
What to look for in the comparison
When comparing MSP pricing to in-house hiring, the honest comparison includes:
- Total employment cost of the hire (not just salary)
- Cost of tools the hire would need that aren't included in salary
- Cost of after-hours and on-call coverage, or the cost of not having it
- Cost of specialist consulting for things outside the hire's expertise
- Recruitment cost and the risk of the hire leaving (average tenure of IT staff at SMBs is 18–24 months)
Compared against MSP pricing that includes monitoring, patching, security tooling, helpdesk, and after-hours response — the numbers usually tell a clear story for teams under 50 people.