How much does software maintenance cost per year?

How much does software maintenance cost per year?

Plan on 15 to 20% of the original build cost per year for software that’s actively used, and up to 25% for mobile apps and fast-moving products. It’s a rule of thumb rather than a law, but it’s consistent across Australian providers: VT Digital’s 2026 guide cites 15 to 20% a year, and Aizecs cites 15 to 25%.

Here’s what that looks like in AUD, ex GST, for common system types, per year and as a monthly maintenance fee. These are typical planning ranges, not quotes, and exclude hosting and licences.

System	Illustrative build cost	Typical rate	Annual maintenance	Monthly equivalent
Stable internal tool, few integrations	$80k	12 to 15%	$9.6k to $12k	$800 to $1,000
Business web app with integrations	$150k	15 to 20%	$22.5k to $30k	$1,875 to $2,500
Commercial SaaS product	$250k	18 to 25%	$45k to $62.5k	$3,750 to $5,200
Web plus iOS and Android apps	$300k	20 to 25%	$60k to $75k	$5,000 to $6,250
Enterprise platform	$600k	15 to 20%	$90k to $120k	$7,500 to $10,000

Why a percentage of build cost? Because the build cost is a decent proxy for how much code, how many integrations and how much complexity there is to keep working. A bigger, more connected system has more that can break and more that needs updating.

Why does software need maintenance if nothing is broken?

Because the world around the software keeps changing, even when the code doesn’t. The IEEE’s Software Engineering Body of Knowledge (SWEBOK) treats maintenance as its own discipline, and the international standard for it, ISO/IEC/IEEE 14764, classifies the work into categories. The four classic ones are:

Type	What it means	Examples
Corrective	Fixing faults found in use	A report shows wrong totals for a date range
Adaptive	Keeping the software working in a changed environment	Runtime upgrades, new OS versions, a partner’s API change
Perfective	Improving it for users or performance	A faster search, a clearer form, a new export
Preventive	Fixing latent problems before they cause failures	Replacing a deprecated library, adding tests, tightening security

Most of the effort goes into adaptive and perfective work, not bug fixes. The environment moves on a published schedule:

• Runtimes. Node.js ships a new major version every year, and its long-term support releases receive critical fixes for about 30 months. A backend built today will need at least one major runtime upgrade within three years.
• Mobile platforms. From 31 August 2026, new apps and updates on Google Play must target Android 16 (API level 36) or higher, and that requirement advances each year. An Android app that isn’t updated can’t ship fixes.
• Security vulnerabilities. New vulnerabilities are found in popular libraries constantly. Each needs assessing and, where relevant, patching.
• Third-party APIs. Payment, accounting, mapping and AI providers version and retire their APIs, sometimes with only months of notice.

What does a maintenance budget actually buy?

A good maintenance arrangement keeps the system secure, current and working, with a small allowance for improvements. Typical inclusions, and what’s normally excluded:

Usually included	Usually excluded (quoted separately)
Security patches and dependency updates	Major new features or modules
Runtime, framework and OS upgrades within a version family	Full redesigns or platform migrations
Monitoring, alerting and incident response	Hosting, domains and third-party licences
Bug fixes	Work caused by changes you make outside the agreement
Small changes and content updates within the hours allowance	Data fixes caused by user error beyond a set allowance
Backup checks and restore testing	Out-of-hours cover, unless purchased
Monthly report on work done and risks	Penetration testing by an independent firm

The right-hand column is where the hidden costs of maintenance usually sit, so ask any provider for this list in writing. The most common dispute in support arrangements is whether something is a bug (covered) or a change (billable).

Which support model suits you, and what does it cost?

Match the model to the cost of the system being down. An internal tool used weekly doesn’t need the same arrangement as a platform customers use to make payments.

Model	How it works	Typical cost (AUD, ex GST)	Suits
Ad hoc, time and materials	Pay per request at an hourly or daily rate, no commitment	Hourly or daily rates, no minimum	Internal tools where little is at stake
Prepaid block of hours	Buy hours in advance at a discount; draw down as needed	$5k to $20k blocks	Systems with irregular change
Monthly retainer	Fixed monthly fee for a set number of hours, maintenance tasks and business-hours response	$1,500 to $15,000 a month	Most critical business systems
Managed service with 24/7 SLA	Retainer plus on-call cover, restoration targets and reporting	$8,000 to $30,000+ a month	Platforms that earn revenue or face the public

These ranges follow from day rates. At the time of writing, Re:Sourced reports senior engineer contractor day rates in Sydney of $800 to $1,100, and agencies charge more to cover continuity, tooling and cover for leave. At an assumed market rate of $1,400 a day, which is not our rate, a retainer of two days a month is $2,800 a month; five days is $7,000. Round-the-clock on-call cover adds cost because someone has to be available, whether or not anything breaks.

A typical severity scheme looks like this, though targets vary by agreement:

Severity	Example	Typical response target
Critical	System down or data at risk for all users	1 to 4 business hours, or 1 hour on 24/7 plans
High	Major feature broken, no workaround	4 to 8 business hours
Medium	Feature impaired, workaround exists	1 to 2 business days
Low	Cosmetic issue or question	3 to 5 business days

A worked example: maintaining a $200k business application

Here’s how a maintenance budget breaks down for an illustrative system. The system: a customer portal and internal admin app built for $200k, with a Node.js backend, PostgreSQL database, integrations with Xero and a CRM, hosted in AWS Sydney. At 15 to 20%, the annual budget is $30k to $40k. Here’s how a provider might plan a year at an assumed market rate of $1,400 a day (not our rate):

Activity	Days per year	Cost
Monthly dependency and security updates (0.5 day a month)	6	$8,400
One major runtime or framework upgrade	4	$5,600
Bug fixes and incident response	6	$8,400
Integration changes (API version updates from Xero or the CRM)	3	$4,200
Small improvements requested by users	6	$8,400
Monitoring review, backup restore tests, monthly reporting	2	$2,800
Total	27	$37,800

That’s 18.9% of the build cost, or $3,150 a month as a retainer. On top of that sits hosting, which for a system like this in an Australian AWS region might run a few hundred to a couple of thousand dollars a month depending on size and redundancy.

If the business wanted a significant new module during the year, that would be quoted as a separate project, not squeezed into maintenance hours.

Is software maintenance worth the cost? What happens if you skip it

Maintenance is worth paying for on any system your business relies on, because skipped maintenance doesn’t disappear; it accumulates, and it gets more expensive the longer you wait. The US Government Accountability Office reported in 2025 that federal agencies typically spend about 80% of their IT budgets operating and maintaining existing systems, much of it on legacy systems that became expensive precisely because they fell behind.

The pattern at smaller scale is familiar:

1. Updates are deferred to save money.
2. Dependencies fall several major versions behind; some reach end of life.
3. A security issue, a platform deadline or a needed change forces action.
4. The catch-up upgrade now touches everything at once, costs several years of maintenance in one go, and carries real risk.

At that point the conversation often shifts to modernisation. Our legacy modernisation cost guide covers what that costs.

How can you reduce maintenance cost?

The biggest savings are designed in during the build, not negotiated afterwards. Levers that work:

• Choose mainstream, well-supported technology. Popular frameworks get security fixes quickly and have large pools of developers.
• Keep dependencies lean. Every library is something to update. Fewer, better-maintained ones reduce the monthly load.
• Insist on automated tests. Tests make upgrades fast and safe; without them every update needs manual checking.
• Automate updates. Tooling that proposes dependency updates and runs tests on them turns a monthly chore into a quick review.
• Update little and often. Monthly small updates cost less over a year than one large catch-up.
• Retire what nobody uses. Unused features still need maintaining. Usage data shows what can go.
• Keep ownership clean. Hold the source code, documentation and every account in your organisation’s name so you can change providers without a costly handover.

Not sure what state your current system is in? A code audit gives an independent view of dependency age, test coverage and risk, which is also the best basis for a maintenance quote.

How does maintenance fit into total cost of ownership?

Over five years, maintenance and hosting often cost as much as the original build. A $200k system at 18% a year costs $36k annually, or $180k over five years, before hosting. That’s why build and maintenance should be priced together when you compare options. It’s also a key input when weighing custom software against a SaaS subscription; see how much custom software costs for the build side, and freelancer vs agency vs in-house for who should do the maintaining.

How AWLabs approaches maintenance

Every build comes with a 30 day warranty from launch: we fix bugs and anything caused by our work at no cost. After that, we offer a Care Plan, month to month with no minimum term, covering hosting, updates and security patches, bug fixes, backups and monitoring. Support runs in Sydney business hours, and response times are targets set out in the plan. Once the final payment is made, the repository and accounts are in your name, so you can move providers at any time. For a system we did not build, we start with a Discovery Audit. Read more about our software maintenance and support service.