SaaS spend per employee

Annual per-employee SaaS costs remain flat for Q4, but December figures indicate a sharp surge

While the quarterly average for SaaS spend per employee has remained flat for the first time in years, the monthly breakdown shows that as of December 2025, it reached $9,400 per year, marking the highest recorded spend yet. This indicates that even with a stable quarterly average, monthly costs can still surge, reflecting seasonal pressures, contract renewals or shifting team needs.  

The continued rise in per-employee SaaS costs is the result of multiple converging factors:

• SaaS price inflation – Software costs have been on a steady upward trajectory over the past few years, with a Q4 2025 average of 13.5% – more than four times higher than general market inflation.
• Workforce reductions – Despite over 120,000 roles having been cut in the tech sector alone in 2025, many companies remain locked into annual or multi‑year SaaS contracts. With 37% of these agreements tied to user-based pricing (and a further 30% on hybrid models), headcount reductions don't immediately lower SaaS spend, leaving companies paying for licenses that are no longer in use.
• Fragmented tech stacks – The widespread adoption of specialized, single-purpose tools (‘point-SaaS’) has led to an accumulation of applications, driving up spend per employee as businesses manage more overlapping licenses and subscriptions.
• Growing tech stacks – The average SaaS stack now consists of 136 tools, up 5% YoY. As companies add more applications without proportional headcount growth, SaaS spend per employee will continue to rise.

These factors suggest that even if overall headcount or quarterly averages appear stable, companies may continue to see spikes in per-employee SaaS spend as pricing pressures, contract structures and tech stack complexity persist.