SaaS Spend Benchmarks: Are You Overpaying for Software?

Companies of a similar size can pay very different amounts for the same SaaS product, and list prices don’t show what comparable buyers actually pay. Spendesk’s analysis of 2,500 European companies found that businesses buying the same software at a similar scale were often paying two to four times more than the most disciplined buyers.

This guide helps finance and procurement teams close that gap. It covers normalising spend per employee and per active user, benchmarking within software categories, spotting unused licences and unintentional duplicate tools, a practical benchmarking process, and questions to ask vendors at renewal. By the end, you’ll know whether you’re overpaying before your next renewal and can decide whether to renew, consolidate, reduce seats, or renegotiate.

Key takeaways:

• Total software spend tells you little on its own, so normalise it per employee and, where possible, per active user.

• Companies of a similar size can pay very different amounts for the same SaaS product, so list prices are a weak guide to a fair price.

• Benchmark within software categories, comparing CRM with CRM rather than across different types of tools.

• Unused licences and unintentional duplicate tools can waste money even when the unit price looks competitive.

• Run the benchmark before renewal, so you can decide whether to renew, consolidate, reduce seats, or renegotiate.

What are SaaS spend benchmarks?

SaaS spend benchmarks are reference points that help a company judge whether it is spending a reasonable amount on software. For example, if two 200-person companies both use the same tool, but one pays €4 per employee and the other pays €16 per employee, that difference is a benchmarking signal worth investigating.

That might mean comparing:

• Software spend per employee

• Annual spend with a specific vendor

• Spend within a software category

• Licence utilisation

• The percentage of total operating spend going to software

• What comparable businesses pay for the same product

Total spend alone is rarely a useful benchmark. A 200-person company will naturally spend more on software than a 20-person company, so comparing their total bills tells you very little. Instead, finance teams need to normalise the numbers, and one of the simplest calculations is:

Annual vendor spend ÷ average employee count = annual SaaS spend per employee

Monthly vendor spend ÷ employee count = monthly vendor spend per employee

The monthly version works in the same way as the annual one. Either figure gives finance teams a much more useful basis for comparing companies of different sizes.

How much do European companies spend on software?

Spendesk analysed twelve months of transaction data across European companies, including card payments and other invoice or subscription transactions. The companies in the study spent almost €250,000 per year on software on average.

But averages leave important pricing differences hidden. Spendesk analysed more than 35 common per-seat SaaS vendors and compared how much businesses paid per employee while controlling for company size. For each vendor, the higher benchmark was at least three times the lower benchmark. For example:

Across the dataset, per-employee costs could differ by roughly three to six times, even after accounting for company size. Spendesk estimates that these price differences could represent roughly €7 billion in annual SaaS overpayment across European businesses with 50 to 250 employees. Different plans, contract terms, features, and usage levels can justify higher prices. But large price differences are a strong signal that finance teams should investigate.

Why does the same software cost different companies different amounts?

SaaS pricing can look straightforward from the outside, but the amount appearing on an invoice can depend on:

• Number of licences

• Plan tier

• Contract length

• Negotiated discounts

• Historic pricing

• Annual versus monthly commitments

• Add-ons

• Unused seats

• Local pricing

• When the contract was last renegotiated

This creates a problem for buyers, because published prices show the list price rather than what companies like yours pay. Spendesk’s analysis found that even relatively straightforward products can show substantial differences between buyers.

For finance teams, a renewal should ask two questions:

“Can we afford this?”

“Is what we’re paying competitive?”

SaaS spend per employee versus total SaaS spend

Both metrics are useful, but they answer different questions. Total SaaS spend tells you the absolute financial impact. If your company spends €300,000 per year on software, finance needs to know that regardless of headcount. SaaS spend per employee makes comparison easier. Imagine two businesses:

Company B spends twice as much overall, but its software cost relative to headcount is lower, so finance still needs to investigate whether it’s more efficient. The same principle applies to individual vendors. If two 200-person companies use the same software and one spends €4 per employee while the other spends €16, the difference deserves attention.

How to identify above-market SaaS pricing

You don’t need a perfect database of every SaaS contract in Europe to start benchmarking, so begin with your own portfolio.

1. Calculate spend by vendor

Bring together payments made through every channel, so a vendor doesn’t appear smaller because its spend is split across payment methods:

• Invoices

• Company cards

• Direct debits

• Reimbursements

• Other payment methods

2. Calculate spend per employee

For seat-based software, divide the cost by headcount, and where possible also calculate spend per active licence. The difference can be large: a €12,000 contract covering 100 licences costs €120 per provisioned licence. If only 50 employees actively use the product, though, the effective cost is €240 per active user.

3. Compare similar vendors and categories

Benchmark categories separately, and don’t compare CRM software directly with design software or an AI assistant. Instead, compare:

• CRM against CRM

• Project management against project management

• Collaboration software against collaboration software

• AI assistants against comparable AI tools

4. Investigate outliers

Each outlier gives finance a question worth asking, so look for:

• Unusually high cost per employee

• Sudden price increases

• Growing licence counts without growing headcount

• Large differences between departments

• Products substantially above external benchmarks

How unused licences and duplicate tools distort benchmarks

Price is only one part of SaaS efficiency. Companies can negotiate an excellent unit price and still waste money if nobody uses the licences.

Duplication creates another problem. Spendesk found that 72% of companies using AI tools paid for two or more competing products, while the equivalent figure for design software was 64%. Across European businesses with 50 to 250 employees, Spendesk estimates that software duplication represents a potential €3 billion annual opportunity. Different teams may have legitimate reasons to use different AI products, such as a marketing team and an engineering team, so finance should focus on unintentional duplication.

If nobody can answer the following questions, finance has a visibility problem as well as a pricing problem:

• Who owns each tool?

• Why do we use it?

• Who uses it?

• What similar products do we already pay for?

• When does it renew?

• What would happen if we removed it?

A practical SaaS spend benchmarking process

Finance teams can run a basic benchmarking exercise in seven steps:

1. Build a complete vendor list. Combine invoice and card spend so that recurring software isn’t hidden across different payment methods.

2. Categorise each vendor. Group vendors into categories such as CRM, collaboration, design, AI, development, and finance.

3. Add ownership. Every subscription should have a named owner and department.

4. Normalise spend. Calculate annual and per-employee spend. Where available, also calculate spend per active user.

5. Compare. Use previous contracts alongside internal or external benchmarks.

6. Investigate outliers. Prioritise the largest absolute savings opportunities rather than chasing every small difference.

7. Review before renewal. Use the benchmark to decide whether to renew, consolidate, reduce seats, or renegotiate.

Questions to ask vendors during renewal negotiations

Good benchmarking gives finance a stronger position in renewal talks. The goal isn’t to push every vendor towards the lowest possible price, but to make sure price and business value make sense in light of actual usage. Before signing another contract, ask:

• How does our price compare with customers of a similar size?

• Which discounts are available for our licence volume?

• Are we paying for licences that haven’t been activated?

• Can we reduce our seat commitment?

• Which features are driving our current plan tier?

• What happens to the price if our headcount changes?

• Are there cheaper annual or multi-year options?

• Can unused licences be reassigned?

• What increases should we expect at the next renewal?

• Can you provide usage data before we renew?

When SaaS benchmarking points to a wider control problem

Sometimes finance teams find one overpriced contract. At other times, they uncover a wider issue, with signals such as:

• Subscriptions nobody owns

• Contracts appearing shortly before renewal

• Duplicate products

• Unused licences

• Software purchased outside approval processes

• Large differences between expected and actual spend

When these signals keep appearing, negotiation alone won’t solve the problem, because the business needs better visibility and stronger controls around how software is purchased. Teams should be able to buy the tools they need while keeping software spend visible and accountable, and every purchase should be intentional. That matters more each year, as software pricing differences, duplication, and rapidly growing AI costs all add pressure.

For teams looking for better visibility into planned and actual spending, explore budget management. If you want to see how Spendesk can help centralise and control company spending, book a Spendesk demo.

Frequently asked questions about SaaS spend benchmarks

What is a good SaaS spend per employee?

There’s no single figure that suits every business. A reasonable level depends on your software categories, plan tiers, and company size, so the more useful test is how your cost per employee compares with similar companies buying similar tools.

How often should finance teams benchmark SaaS spend?

A full review once a year, plus a focused check before each significant renewal, is a sensible starting rhythm. A large change in headcount or a new tool category can also justify an earlier look, because both can shift your per-employee figures.

Can you benchmark usage-based or AI tools the same way as per-seat software?

Only partly. Per-employee figures still show the overall cost, but tools priced on usage rather than seats may need a measure tied to how they’re used. They’re best compared against similar tools in the same category.

Who should own SaaS spend benchmarking?

Finance is usually well placed to coordinate it, because it can see payments across invoices, cards, and other methods. The named owner of each tool still matters, since they can explain why it’s needed and how actively it’s used.