5 factors affecting the cost of website hosting

Here, we explain the key factors that impact web hosting fees. Keep reading to discover what sort of price points are appropriate for your business.

Web hosting plan inclusions

Hosting providers structure their pricing around the features and resources included in each plan. Naturally, plans that offer higher storage capacity, greater bandwidth, or advanced features come at a higher price.

To make the most of your investment, it’s essential to assess your website’s resource needs carefully. Look at factors like traffic volume, storage requirements, and any specific features you may need.

By aligning your hosting plan with your actual needs and budget, you can avoid overpaying for unnecessary extras or facing limitations down the line.

Contract length

The duration of your hosting contract can have a big impact on what you pay. Many providers reward longer commitments with significant discounts, making contract length a key factor in your overall costs.

Monthly plans offer flexibility but come with higher rates, making them better suited for short-term projects or those who want to test the waters before committing.

On the other hand, annual plans provide a balance between cost savings and commitment, often delivering a noticeable price break compared to monthly options.

For the best value, multiyear contracts typically offer the lowest per-month rates. However, they require a solid long-term commitment, so it’s essential to be confident in your hosting provider and your website’s needs before locking in.

Managed versus self-managed services

When it comes to web hosting, you have two main options: managed or self-managed services.

Managed hosting takes the hassle off your plate, covering everything from server setup and configuration to ongoing maintenance. It’s a more comprehensive solution, often provided by digital agencies (like Redback), allowing you to handle all your website needs in one place.

This option typically costs more, as pricing includes not just the wholesale server costs but also the man-hours needed for tasks like updates, bug fixes, and support management.

The result? A website that runs smoothly without any headaches.

In contrast, self-managed hosting puts the responsibility in your hands. While it’s a cheaper alternative, you’ll be in charge of server management tasks, including maintenance, updates, and troubleshooting.

For those without the time or expertise to dive into the technical nitty-gritty, managed hosting is often the best choice. While it may be more expensive, it ensures your website stays functional, secure, and user-friendly, without the stress.

Server location

The location of a hosting provider’s data centre can directly influence what you pay. Servers in high-demand regions or areas with higher operational costs often come with steeper price tags.

Some hosting companies even adjust their pricing based on the geographic region, so where you host can make a difference to your bottom line.

Beyond cost, server location plays a critical role in website performance. Choosing a server close to your target audience can significantly reduce network latency, delivering faster load times and a better user experience.

For instance, if most of your visitors are in Sydney, hosting your site on an Australian server can give them quicker access compared to overseas servers.

The key takeaway?

Investing in a nearby server can boost performance and keep your visitors happy while still offering great value for your money!

Hosting type

The type of hosting you choose plays a major role in determining your overall costs. Hosting options range from budget-friendly shared plans to premium dedicated and cloud hosting solutions, each tailored to different needs and budgets.

Shared hosting is typically the most cost-effective choice, as multiple websites share the same server resources. It’s a great starting point for smaller sites or those on a tight budget. Costs depend on factors like storage requirements and additional features such as add-on domains or extra databases.

At the other end of the spectrum is dedicated hosting, where you get an entire server exclusively for your website. This option provides top-notch performance, maximum customisation, and unparalleled control—making it the priciest choice overall.

Still not sure which hosting type fits your needs?

Keep reading as we break down the website hosting costs and benefits of each option.

Website hosting cost comparison

Whether you’re running a single landing page or a feature-packed ecommerce store, the right hosting option makes all the difference to your online business.

Web hosting generally falls into five main categories. Once you figure out which one fits your website’s needs, you’re well on your way to finding the right hosting provider at the right price.

Shared hosting

With prices starting at just a few dollars and capping out at around AUD$ 70 per month, shared hosting plans are the most economical way to get online. This affordability stems from sharing a single server, along with its bandwidth, storage, and processing power, with hundreds or even thousands of other websites.

Think of shared hosting as the starter pack for small to medium-sized websites. It’s perfect for sites with low-to-moderate traffic demands.

Most shared plans can handle up to 400,000 monthly visitors, but as your audience grows, you may notice the equivalent of “traffic jams” on your site—slower loading times and performance hiccups. At this point, it might be time to upgrade to a more powerful hosting solution that can keep up with your traffic.

Pros

• Hassle-free onboarding: Shared hosting is designed with beginners in mind. With clear step-by-step guides and a user-friendly dashboard, getting your site up and running is a stress-free process, even for those new to website management.
• Low maintenance: Let the hosting provider handle the heavy lifting. From server management and updates to security monitoring, everything is taken care of, leaving you free to focus on building your website and crafting content.
• Budget-friendly: Shared hosting is a cost-effective solution, offering all the essentials at a fraction of the cost of other hosting options, making it an ideal choice for those starting on a budget.

Cons

• Restricted resources: Sharing server resources means that heavy traffic to other websites can impact your site’s performance.
• Security risks: A breach on one site within the shared server could potentially expose others to risks.
• Scaling challenges: Shared hosting offers limited capacity for growth, making it unsuitable for websites expecting significant traffic increases.
• Slower speeds during high traffic: Performance can suffer during peak traffic times due to the shared nature of the server.

WordPress hosting

This type of hosting is essentially shared hosting fine-tuned for WordPress, the world’s leading content management system (CMS). Plans range from about AUD$38 for entry-level packages to over AUD$25,000 for enterprise-level solutions.

With WordPress hosting, you’ll find WordPress pre-installed on your server or available with a one-click installation. Automated software updates ensure your site stays current without any extra effort on your part.

This can be a great choice for many building a WordPress-powered blog, hobby website, or small business site. That said, there are customisation and traffic limits to consider.

Pros

• Purpose-built for WordPress: Get access to specialised features and tools designed to boost performance, enhance security, and make managing a WordPress site effortless.
• Hands-off updates: Enjoy peace of mind as your WordPress site automatically updates its core software, themes, and plugins, keeping it secure and running smoothly.
• Dedicated expertise: Many providers include access to WordPress-savvy support teams who can quickly resolve issues and answer platform-specific questions.
• Flexible pricing: WordPress hosting fits a variety of budgets, from affordable plans for beginners to premium packages for enterprises.

Cons

• Pre-installed features: Some plans include themes or plugins ready to go, which can be helpful if you’re just starting. If you need something different, discuss the requirements with your provider to find a setup that suits your business best.
• Shared hosting restrictions: WordPress hosting plans operate on shared servers. While that can mean slight slowdowns during big traffic spikes, your site performance will be monitored closely.
• Traffic limits: Lower-tier plans are designed for smaller sites and include visitor limits. If your site starts growing quickly (which we love to see!), consider upgrading to a plan that supports your large audience. Managed properly, it can be a seamless transition.

Virtual private server (VPS) hosting

If shared hosting feels too limiting but a dedicated server is more than you need, VPS hosting strikes the perfect balance. While it’s pricier than shared hosting, it offers significant benefits in terms of dedicated resources and customisation.

With VPS hosting, you still share a physical server with other users, but the server is divided into multiple virtual partitions. Each of these virtual servers operates independently, giving you access to dedicated storage, bandwidth, and other resources. This setup allows your website to handle higher traffic volumes, improves overall performance, and enhances security.

VPS hosting is ideal for medium to large businesses or growing websites that have outpaced the limitations of shared hosting but aren’t ready for investment in a dedicated server. It’s also a great choice if you need greater control over your hosting environment, although some advanced customisation options may remain restricted.

VPS hosting plans range from as low as AUD$10 to over AUD$300 per month, depending on your provider and whether it is a managed or self-managed plan.

With self-managed VPS hosting, you’ll handle the server’s configuration and maintenance, making this a cost-effective option for those with technical expertise or access to a system administrator.

Meanwhile, managed VPS hosting services take care of server management, updates, and maintenance. While this convenience comes at a higher price, it’s a hassle-free option for those who prefer to focus on their website rather than the backend.

To make the most of your budget, assess your website’s needs for CPU, RAM, and storage to avoid paying for unused resources.

Pros

• Scalable resources: As your website grows, you can easily increase your CPU, RAM, or storage without moving to a new server.
• Improved performance: Dedicated resources mean your website experiences better stability and faster load times, even during traffic spikes.
• Customisation options: VPS hosting gives you control over your server setup, including the choice of operating system and the ability to install specific software.

Cons

• Shared resources: While each VPS is isolated, a failure in the physical server hosting your virtual machine can impact all VPS accounts on that server.
• Technical expertise needed: Setting up and managing a VPS can be tough without a background in server management.
• Only partial control: Although you have more freedom than with shared hosting, you’re still bound by the limitations of the physical hardware and the hosting provider’s infrastructure.

Dedicated hosting

Dedicated hosting is generally the most expensive hosting option, with costs ranging from AUD$ 100 to over AUD$ 1,000 per month, depending on whether you opt for a managed or self-managed plan. But there’s a good reason for the higher price tag.

Designed for large-scale websites with substantial traffic or extensive data storage needs, like major eCommerce platforms, a dedicated hosting plan provides exclusive access to an entire physical server. This means all server resources, including processing power, storage, and bandwidth, are fully allocated to your website for top-tier performance.

For businesses requiring advanced security measures or full control over server configurations, this hosting type delivers unmatched flexibility and reliability. It enables seamless handling of heavy traffic, faster load times, and reduced downtime. The dedicated resources, such as ample RAM and bandwidth, ensure even the most demanding websites operate smoothly.

Whether you’re running a high-traffic site, managing complex applications, or needing maximum stability and security, dedicated hosting can be a worthwhile investment.

While it requires a larger budget and technical know-how, its robust performance and dependability make it the ultimate solution for those who cannot compromise on their hosting needs.

Pros

• Complete control: Enjoy full autonomy over server settings, allowing for custom software installations and configurations.
• Exceptional performance: Dedicated resources ensure lightning-fast load times and unparalleled stability, even under heavy traffic.

Cons

• Higher price tag: Dedicated hosting is the most expensive option, reflecting the level of resources and exclusivity provided.
• Technical know-how required: Setting up and managing a dedicated server demands advanced technical skills.
• High maintenance: With self-managed plans, you are accountable for tasks such as applying updates, security patches, and server upkeep.

Cloud web hosting

Cloud hosting takes a modern approach to web hosting by using a network of virtual servers instead of relying on a single physical server.

This structure often makes it the most reliable website hosting option for clients with high or unpredictable traffic, such as growing small businesses, medium-to-large organisations, or eCommerce platforms preparing for seasonal surges.

Unlike traditional hosting plans that charge a fixed monthly fee, cloud hosting often operates on a pay-as-you-go model. Costs are calculated based on the hours the servers are used and the resources consumed, offering flexibility for dynamic, fast-paced businesses.

While it tends to be one of the more expensive hosting solutions, you can manage costs by choosing providers with flexible pricing models, such as reserved instances or dynamic resource allocation.

Pros

• Seamless scalability: Resources can be added or removed as needed without disrupting your site’s operation. This makes cloud hosting an excellent choice for websites experiencing rapid growth or unpredictable traffic patterns.
• Superior reliability: If one server goes offline, another automatically steps in, keeping your site operational. With multiple servers in play, the risk of downtime due to hardware failure is significantly reduced.
• Strong security: Data redundancy ensures that multiple copies of your website are stored across servers, providing a safety net in case of accidental loss or cyberattacks.
  Traffic load balancing: Cloud hosting dynamically adjusts resources to handle traffic spikes, delivering smooth performance during high-demand periods.

Cons

• Very technical: Setting up and managing cloud hosting can be challenging, especially with providers like Google Cloud Platform (GCP) or AWS, which require familiarity with their systems.
• Reduced control: Users have less control over their hosting environment as management is handled by the hosting provider.
• Higher support costs: Cloud hosting is often pricier than traditional hosting options, particularly when paired with robust support packages and additional features.

Hidden fees on top of website hosting costs

In addition to website hosting costs, extra expenses aren’t always included in the advertised base price.

Knowing about these hidden fees upfront can help you avoid surprises and ensure you’re fully aware of what’s included—and what’s not—before committing to a hosting plan.

Here’s a rundown of some common add-ons you might come across.

Domain registration

Every website needs an address, and that’s where your domain name comes in—it’s your online identity. But securing that perfect name isn’t free; you’ll need to pay a registration fee to make it yours.

Many hosting providers offer domain registration as an add-on service, but it’s a separate cost from your hosting plan. Depending on the registrar and the domain extension (.com.au, .au, etc.) you choose, you can expect to pay anywhere from around AUD$ 10 to AUD$ 50 per year.

Extra security features

Hosting your website also means taking responsibility for its security, ensuring it’s protected against malware, hackers, and other cyber threats.

While most hosting providers include basic security measures, such as protection against DDoS attacks, these default features might not be enough to keep your site fully secure. For robust protection, it’s worth considering additional security tools and software.

For instance, you could invest in a firewall system that acts as a shield against unauthorised access and malicious activity, safeguarding your website and private network.

SSL Certificates

An SSL certificate is essential for protecting your website and its users. It not only verifies your site’s identity but also encrypts sensitive data, such as personal details and payment information, sent between your website and the server.

This added layer of security is especially important for Ecommerce sites or any platform handling private user information.

Many hosting providers include a free SSL certificate for the first year, but once it expires, you may need to pay up to AUD $200 each year, particularly if you choose a premium certificate.

That said, some hosting packages come with a free SSL certificate included, even beyond the first year.

Taking the time to compare hosting deals can help you secure the best value while keeping your website safe.

Website backups

When things go wrong—and there’s always a risk—having a reliable backup can be the difference between a quick recovery and a major headache. And these invaluable safety nets rarely come free.

While some hosting plans include basic backups, they might not be enough as your website grows and becomes more complex.

For more robust protection, many providers offer advanced backup options as paid add-ons, ensuring you’re always ready to bounce back if the unexpected happens.

Should I pay for website hosting monthly or annually?

Choosing between monthly and annual payments for website hosting depends on your budget, website requirements, and the pricing options offered by your provider.

Many hosting providers offer significant discounts for annual subscriptions, making it a more economical choice over time. If your budget allows for an upfront payment and you’re confident in your long-term hosting needs, an annual plan can save you money.

On the other hand, if you’re uncertain about committing for a full year—maybe your website is new, or your traffic patterns are unpredictable—opting for monthly payments provides greater flexibility. This approach allows you to test the waters and make changes without being locked into a long-term contract.

Ultimately, the best option is the one that aligns with your financial situation and your website’s growth trajectory. Weigh the savings of annual plans against the adaptability of monthly payments to make the right call for your business.

How to choose a website host that saves you money

With a few smart choices, you can curb website hosting costs without compromising performance.

Follow these steps to choose the right website host for your budget.

Compare plans and providers

Start by researching hosting providers and plans. Decide on the type of hosting you need (shared, VPS, dedicated, or cloud), then compare features, pricing, and customer reviews. A provider that fits your budget and offers reliable service is crucial—don’t overspend on features you won’t use.

Sign a long-term contract (if it makes sense for your business)
As noted earlier, hosting providers offer a range of contract lengths, which can directly impact the amount you’ll pay. To save money on web hosting, consider signing up for the long run.

Many providers offer discounts for committing to annual or multi-year plans. These contracts often come with lower monthly rates, giving you stable and predictable expenses.

That said, research thoroughly before locking in—you don’t want to be stuck with a provider that doesn’t meet your needs.

Watch out for renewal prices

Introductory offers can be tempting, but they’re often temporary. Once the initial term ends, renewal rates may be significantly higher. Make sure you know the standard renewal cost upfront to avoid unpleasant surprises.

Plan for growth

Your website is likely to grow, so choose hosting that can scale with it. Whether it’s handling more traffic, adding storage, or upgrading server resources, opt for a host that makes adjustments seamless. This will save you from needing an expensive migration later.

Skip unnecessary add-ons

Hosting providers often try to upsell features like domain registration, SSL certificates, email services, or website builders. Evaluate your actual needs—if you can source these separately at a lower cost, skip bundled extras to save money.

Optimise website performance

As we explained earlier, the amount of server resources your website needs can affect how much you spend on hosting. To minimise costs, make sure your website is developed for high performance and optimised regularly.

For example, implement performance optimisations like caching, image compression, and auto-scaling. Tools such as PageSpeed Insights and GTmetrix can help you pinpoint areas for improvement.

Beware of budget website hosting

“Free” or super-cheap website hosting might catch your eye, but what’s the real price?

Unfortunately, it’s often far more than you bargained for.

Sure, starting with an inexpensive plan and upgrading later sounds reasonable—until you realise the hidden pitfalls. With budget website hosting, downtime is a real risk, and getting support to fix it can feel like shouting into a void.

Ultimately, that small monthly saving could become lost revenue, frustrated customers, and a lot of stress.

This is because cheap hosting services typically pack multiple websites onto shared servers, splitting critical resources like memory and bandwidth. When another site hogs those resources during a traffic spike, your website crawls—or worse, crashes.

Visitors lose patience, Google frowns on your slow load times, and you’re left picking up the pieces. Meanwhile, potential customers turn to competitors.

Don’t let “cheap” become costly.

Quality website hosting is the foundation of a reliable, professional website—an investment that pays off in uptime, speed, and peace of mind.

How much should you spend on hosting?

To work out your website hosting budget, you’ll need to consider several key factors to ensure you’re making the right investment for your needs.

• Expected traffic: Assess your current and forecasted website traffic volumes. Sites with higher traffic demand more server resources, so you’ll need a plan that can handle increased visitor numbers without compromising performance.
• Budget constraints: Determine how much you’re willing to spend. Hosting costs vary widely, so take monthly or annual expenses into account, plus any potential upgrades as your site scales.
• Storage and bandwidth needs: Choose a flexible hosting plan that can support the website’s content, databases, and emails as your business grows.
• Tech skills: If you’re not tech-savvy, consider managed hosting services. While they may cost more, these plans handle the heavy lifting, including maintenance, updates, and security, saving you time and stress.

Balancing these factors will help you choose a hosting solution that fits your budget while supporting your website’s goals and growth.

Keep your website fast, secure and up-to-date from just $100p/m

How much does website hosting cost in Australia? The final charge depends on what you’re after. Web hosting price is influenced by the provider and type of plan you choose, including the services and features needed to keep your site running at its best.

But remember, the plan’s fee is just the beginning—extras like backups, domain registration, SSL certificates, and security upgrades can quickly ramp up your spend.

Investing in quality hosting is one of the smartest moves you can make for your website. It ensures faster load times, better search engine rankings, and a seamless experience for your visitors. Plus, it gives you peace of mind knowing your site is secure, reliable, and ready to handle anything.

At Redback, we’ve got your hosting needs covered. From WordPress and Craft CMS to custom PHP sites and government intranets, our high-performance dedicated servers support seamless online experiences to keep your site visitors happy and your SEO on point.

Ready to take the hassle out of website hosting?

Discover fully managed, cost-effective website hosting plans starting at just AUD$ 100 per month. Based in Australia, our dedicated Hosting Manager handles everything from web hosting to domain management, ensuring your site is fast, secure, and always up to date.

Chat with our team to receive a tailored proposal with everything your website needs to run smoothly.