Compliance 101  /  Growth

How much does SOC 2 compliance cost in 2021?

How much does SOC 2 cost?

If you’re like your competitors, it’s time to factor compliance into your 2021 budget. For most tech companies, that means getting and staying SOC 2 compliant. But how much does SOC 2 cost for a business tackling the process for the first time? Taking on SOC 2 can be complicated and expensive unless you plan it correctly.

There are plenty of factors that can shift the cost of getting SOC 2 compliant. These include:

  • Number of employees
  • Scope
  • Time frame
  • Vendor selection and management
  • Auditors

TDLR; without managing your SOC 2  process with experts and a software platform, it could cost upwards of $80,000 and last over 18 months.

Scope and Gap Analysis

Before getting into the execution of your SOC 2, a compliance expert will need to evaluate the information security practices already in place. Whether you’re looking to renew your SOC 2 certification or starting from scratch, this is an important step to understanding the scope of work needed.

Time: 1 week

Cost: $5,000-$10,000

To get an inside look into the process, check out our blog post on our own SOC 2 gap analysis.

Control Implementation

After establishing the gaps that need to be addressed and a remediation plan, your compliance team will dive into implementing SOC 2 controls. While you may think the audit is the most important part of SOC 2, implementation is really the main event. You can learn more about implementation from Laika’s SOC 2 certification here.

This cost varies based on the controls needed, how much you outsource versus build internally, and your timeline. If you handle it internally, you’ll need to make a full-time hire or reallocate other employees’ work, losing some organizational efficiency and productivity.

Time: 1 – 6months

Cost: $5,000-$10,000

This cost as something can be absorbed internally if you have specific hires to manage the process. Otherwise, you’ll likely be losing around 60-100 hours of work from your current employees.

Risk Assessment and Audit Readiness

After all your controls have been implemented, a compliance task force will need to review the evidence you collected, test the operational effectiveness of your controls, and assess your risk. These steps address audit readiness and involve accepting the amount of risk your organization has deemed acceptable.

Time: 2 weeks

Cost: $10,000-$17,000

What to know what is involved in a risk assessment? Find out more here.

SOC 2 Type 1 Audit

A SOC 2 Type 1 audit takes a snapshot of your compliance at a moment in time. The lift for auditors is less than a Type 2 audit because they will not need to test the long-term operational factors of your controls. Organizations starting out with SOC 2 usually start with a Type 1 audit and build up to a Type 2.

The cost and timing of a SOC 2 Type 1 audit are largely dependent on the size of your company. The range listed below encompasses the cost for companies between 5 – 100 employees.

Time: 2 – 3 months

Cost: $12,000 – $27,000

This price excludes legal fees to review your newly-authored information security policies, gathering evidence for auditors, and demonstrating your implemented controls. Because most auditors charge by the hour, the cost can vary based on the amount of time and back-and-forth involved.

SOC 2 Type 2 Audit

SOC 2 Type 2 audits need to be performed annually and, we won’t lie to you, they’re fairly pricey. Not only does it take a significant amount of time for auditors to check the functionality of your controls, but you’ll also likely have more back-and-forth to answer questions and fix mistakes. Depending on the scope of your SOC 2 and the size of your organization, this audit could take up to 9 months to complete.

Like a Type 1 audit, the cost and timing of a SOC 2 Type 1 audit depend on the size of your company. The range listed below encompasses the cost for companies between 5 – 100 employees.

Time: 3 – 9 months

Cost: $15,000 – $100,000+

Again, this price is just for the auditors. It does not factor in legal fees, internal productivity loss, or tools needed to demonstrate your compliance.

Learn more about SOC 2 audits in our post here. 

Additional SOC 2 Costs

SOC 2 isn’t just a one-and-done task. Many of the costs listed below are recurring or constant tasks that will need to be performed as part of your new security posture.

Consultants

Control implementation, a risk assessment, and managing an audit requires at least foundational knowledge of SOC 2 compliance. If you opt for a software-only solution to assist on your SOC 2 journey, it’s likely you’ll need to hire a compliance expert consultant to help the process along.

CISO Cost: $550/hr

CISA Cost: $200/hr

Depending on the complexity of your controls and the necessary experience level of your consultant, the cost will vary.

Policy Templates and Writing

If you don’t have in-house counsel or compliance experts, you’ll need to outsource some paperwork to a legal firm. This includes any new policies you’ll need to author, like risk mitigation, privacy policies, formal business continuity plans, etc.

Time: 2 weeks

Cost: $5,000-$10,000

Depending on which external party handles your audit, you may be able to outsource review of the documents to them as well.

Internal Training

A requirement for SOC 2 is security awareness training for employees. You’ll need to develop the training yourself or outsource; either way, it’ll likely cost time and money to create and execute the training.

Time: 2 weeks

Cost: $1,000/50 employees

The average associated cost depends on the size and maturity of your business, as well as the type of data you handle.

On-going SOC 2 Requirements

A major component for SOC 2 compliance is choosing your vendors, executing due diligence to ensure they are also SOC 2 compliant, or building your own solution to be compliant as needed.
Some of these vendors include endpoint security, logging and monitoring tools, password management, hiring and termination tools and processes, and security awareness training. The cost below is broken down into estimates for each vendor:

Endpoint security

Cost: $190 for 5 licenses

Employee background checks

Cost: $20-$100/per hire

Vulnerability scanning

Cost: $2,000-$2,500

SOC 2 compliance can quickly get very expensive. And it can be difficult to calculate your budget when considering multiple factors, from internal productivity loss to audit firms and vendors. However, SOC 2 is only becoming more imperative to do business. Our experts are always here to help; contact the team for advice and to find out more about Laika’s SOC 2 solution.