How Much Do Companies Lose on Unused SaaS Tools Monthly?

How much do companies lose on unused SaaS tools every month?

Published figures put the loss at roughly 25% to 30% of SaaS spend. Gartner, as cited by Ortto, says organizations lose an average of 25% of their SaaS budgets to unused entitlements and overlapping tools. The same article cites average SaaS spend of $4,830 per employee in 2025. At 25%, that works out to about $100 per employee per month. Your real number depends on your seat counts, usage logs, and duplicate tools, which the formula below turns into a figure.

Which published SaaS waste numbers can you trust?

Most of the headline numbers trace back to vendors who sell spend management, marketing software, or subscription trackers. That does not make them wrong. It means you should know where each one comes from.

Two patterns stand out. First, the 51% and 49% figures are the same statistic from opposite sides, and "unused" there really means "inactive for 30 days." Second, the 23% zero-usage figure is a better picture of true shelfware than the 50% headline.

The sensible reading: somewhere between a quarter and a half of seats are inactive at any moment, and a quarter to a third of dollars are recoverable. Your own data can narrow that.

How do you calculate your own monthly SaaS waste?

Use two components and add them.

1. Unused seat cost. For each tool:

unused seat cost = (paid seats - active seats) × monthly price per seat

Define "active" before you pull data. A login in the last 30 days is the common standard in published reports. If your tools have seasonal or quarterly use (finance, compliance, design for campaigns), use 60 or 90 days to avoid flagging people who really do need the seat.

2. Overlap cost. Where two tools do the same job, count the cost of the one you would drop, usually the less-used or cheaper one. Do not also count its unused seats, or you will count the same dollars twice.

monthly waste = sum of unused seat costs + sum of overlap costs
waste rate = monthly waste ÷ total monthly SaaS spend

Where to get the inputs:

• Paid seats and price: the billing page or invoice of each tool.
• Active seats: the admin console's last-login or last-activity report. Most business tools export it as a CSV.
• Overlaps: a list of every tool grouped by job (chat, video, project tracking, docs, analytics). Any group with two entries is a candidate.
• Tools you do not know about: card statements and expense reports. Purchases made by individual teams are where sprawl hides.

What does a worked example look like?

This is an illustrative company with 100 employees and five tools. The numbers are invented to show the arithmetic, not drawn from a real audit.

Waste rate: $2,381 ÷ $6,425 is about 37%. Annualized, that is about $28,572.

Two things to notice. The CRM is only 22.5% inactive by seat count but produces the largest dollar loss, because the seats are expensive. Rank by dollars, not by percentage. And the flat-fee duplicate tool has no seat math at all, which is why overlap needs its own line.

How do you sanity-check the result with a top-down estimate?

Use the published per-employee figure as a rough ceiling check:

employees × ($4,830 ÷ 12) × waste rate

For 100 employees, total SaaS spend would be about $40,250 a month. At 25%, that is roughly $10,060 of monthly waste. At 30%, about $12,075.

Our five-tool example covers only $6,425 of spend, so a full audit of all tools would find more. If your bottom-up number comes in far below the top-down range once you have covered every tool, either your stack is unusually tight or your audit is missing tools. The second explanation is more common.

The $4,830 figure is also unattributed beyond the Ortto article, so use your own total SaaS spend if you have it.

Is every inactive seat actually waste?

No. Four adjustments keep the number honest:

• Buffer for hiring and churn. Keep a few spare seats if onboarding is frequent and reassigning seats is slow.
• Occasional users. Someone who logs in quarterly for a regulatory task is active in a way a 30-day window misses.
• Annual contracts. You may not be able to recover the money until renewal. The loss is real, but the savings are delayed.
• Tier overspend. A seat that is used but sits on a premium plan whose features nobody touches is waste this formula does not capture. Add it as a third line if you can measure it.

A conservative method is to report two numbers: total inactive-seat and overlap cost, and the portion you could realistically cut at the next renewal.

Why does the waste happen in the first place?

The sources agree on the mechanism. Teams buy tools independently, nobody checks whether the stack already covers the need, and renewals roll over without review. Growth makes it worse, since both spending and the number of buyers increase. Ramp describes it as a quiet drain that compounds as organizations decentralize purchasing. That is why a one-time cleanup tends to decay, and why a recurring review (quarterly is common) matters more than a single audit.