SaaS PPC agency vs in-house: which is right for UK startups?

What to take away

A single in-house PPC specialist costs about £54,850 a year in the UK once a £45,000 salary, employer National Insurance, pension and tooling are added.
Agency retainers for B2B SaaS commonly sit between £1,500 and £6,000 a month, with VAT at 20% added by most UK agencies.
Salary carries no VAT and agency fees do, but VAT-registered firms can usually reclaim that VAT, so the real gap is narrower than the first invoice suggests.
Go in-house when search demand is steady and you already have marketing management; use an agency when you need several specialisms at once.

What you are actually buying

PPC captures demand that already exists. For B2B SaaS, that means searches about a category, a competitor or a specific problem the software solves. Few paid channels convert at that level of intent, so the question is rarely whether to run it, but who runs it.

In-house means product knowledge on tap and no retainer, though you carry the recruitment risk. An agency brings patterns from dozens of comparable accounts and a team you do not have to hire.

The real cost of an in-house hire

Salary is only part of the bill. An illustrative package for one PPC specialist looks like this:

True Annual Cost of In-House Hire

£45,000 | Base salary
£6,000 | Employer National Insurance
£1,350 | Pension contribution
£2,500 | Tools and training

That totals roughly £54,850 a year, or about £4,570 a month, before recruitment fees and before you cover holiday and sick leave. One hire also gives you a single view of bidding and tracking. It does not fix the handover to sales, which is where sales and marketing misalignment usually costs UK SaaS companies money.

Agency fees, benchmarked

Illustrative UK ranges:

UK Agency Fee Models Compared

Freelancer

Monthly fee: £800–£2,000
Cover: One pair of hands
Reporting: Limited

Small agency

Monthly fee: £1,500–£3,000
Cover: Two or three accounts
Reporting: Basic

B2B SaaS specialist

Monthly fee: £3,000–£6,000
Cover: Strategy, creative, analytics
Reporting: Advanced

Percentage of spend

Monthly fee: 10%–15%
Cover: Scales with budget
Reporting: Varies

A £4,000 retainer plus VAT at 20% is £4,800 a month, or £57,600 a year. VAT-registered businesses normally reclaim that £9,600 through their returns, which is why the net comparison with a salary often looks tighter than the headline numbers.

The registration rules and standard rate sit with HM Revenue and Customs. Reclaiming input VAT is handled on your normal return, covered under business tax and returns.

Agency or in-house: how to decide

Below roughly £5,000 a month in media spend, an agency retainer usually eats too much of the return, so a freelancer or a founder-led test is a better use of cash. If cash is tight, finance and support for your business lists government schemes worth checking before you commit.

Above £10,000 a month, the maths changes. A specialist working full time on one account can out-learn an agency juggling eight clients, provided you keep them busy and give them clean data.

Judge both options on the same measure: blended customer acquisition cost, not click-through rate. Our guide to SaaS CAC benchmarks for UK companies sets out the ranges to work against.

What to put in the agency brief

Before signing, agree the terms that decide whether the retainer earns its keep:

The monthly media budget, and who signs off increases.
Which conversions count, and how they are tracked back to the CRM.
A named account lead, and the hours they will spend on your account.
Reporting that ties spend to pipeline rather than to impressions.
Written confirmation that the Google Ads account stays in your name.

Common questions

How much do UK SaaS PPC agencies charge?

Illustrative rates run from £1,500 to £3,000 a month for small accounts and £3,000 to £6,000 for accounts spending £10,000 or more, plus VAT. Some agencies charge 10% to 15% of media spend instead of a flat fee.

Is an agency better than an in-house hire?

Neither wins in the abstract. Agencies win on speed and breadth; in-house wins on product knowledge and control once spend is high enough to keep one person busy.

Can I reclaim VAT on an agency retainer?

If your business is VAT registered and the services support your taxable supplies, VAT on a UK agency retainer is normally reclaimable as input tax. Salary sits outside the scope of VAT, so there is nothing to reclaim on an in-house hire.

What if we only spend £2,000 a month?

At that level a retainer is likely to absorb most of the return, so a freelancer or a short founder-led test usually makes more sense.