SOC 2 Type I vs Type II: Cost and Timeline Comparison

The question we hear most from compliance leads and founders is deceptively simple: should we start with Type I or go straight to Type II? After guiding dozens of organizations through this exact decision, we can tell you that the answer depends on your sales pipeline, your budget constraints, and how quickly you need a deliverable in hand. Here is what we see across our client base — and what we recommend.

A SOC 2 Type I report costs $30,000-$80,000 and takes eight to twenty-two weeks from start to delivery. A SOC 2 Type II report costs $50,000-$150,000 and takes nine to eighteen months. The primary difference is the observation period: Type I evaluates control design at a single point in time, while Type II evaluates design and operating effectiveness over a six-to-twelve-month observation window. What we tell most clients is to pursue Type I first for speed and transition to Type II — which enterprise buyers consider the gold standard — immediately after.

This guide provides benchmark data comparing Type I and Type II across cost, timeline, auditor fees, internal effort, and buyer acceptance. The target audience is compliance leads and founders deciding which report type to pursue and in what sequence.

Cost Comparison

Total Program Cost

Cost Category	Type I	Type II (First Year)
Auditor fees	$15,000-$50,000	$20,000-$80,000
GRC platform	$8,000-$30,000	$8,000-$30,000
Consulting	$3,000-$15,000	$3,000-$20,000
Internal labor	$5,000-$30,000	$10,000-$60,000
Remediation and tooling	$3,000-$15,000	$3,000-$15,000
Total	$34,000-$140,000	$44,000-$205,000

Cost by Company Size

Company Size	Type I Total	Type II Total	Incremental for Type II
Startup (under 50)	$30,000-$70,000	$40,000-$90,000	+$10,000-$20,000
Growth (50-200)	$50,000-$120,000	$65,000-$155,000	+$15,000-$35,000
Mid-market (200-1,000)	$80,000-$180,000	$100,000-$230,000	+$20,000-$50,000
Enterprise (1,000+)	$120,000-$300,000	$160,000-$415,000	+$40,000-$115,000

Where the Cost Difference Comes From

Cost Driver	Why Type II Costs More
Higher auditor fees	Type II requires testing over the observation period, not just point-in-time design review
Extended internal labor	Compliance team must manage evidence collection throughout the six-to-twelve-month observation period
Continuous evidence collection	GRC platform must run continuously; manual evidence tasks must be completed on schedule across the full period
More auditor fieldwork	Type II fieldwork takes two to four weeks vs one to two weeks for Type I
Higher consulting effort	Organizations may need additional consulting to maintain controls during the observation period

Auditor Fee Breakdown

Auditor Tier	Type I Fee	Type II Fee	Difference
Big 4	$50,000-$150,000	$70,000-$200,000+	+40-60%
Mid-tier / National	$30,000-$60,000	$40,000-$80,000	+25-40%
Specialized SOC 2 firms	$15,000-$40,000	$20,000-$55,000	+25-40%
Boutique / Regional	$12,000-$25,000	$18,000-$40,000	+30-50%

Type II auditor fees are typically twenty-five to fifty percent higher than Type I because the auditor must review evidence across the entire observation period and perform more extensive control testing. In our experience, the specialized SOC 2 firms deliver the best value for most growth-stage and mid-market organizations.

Timeline Comparison

Type I Timeline

Phase	Duration	Cumulative
GRC platform setup and integration	1-2 weeks	1-2 weeks
Policy development and approval	2-3 weeks	3-5 weeks
Control implementation and remediation	2-4 weeks	5-9 weeks
Readiness assessment	1-2 weeks	6-11 weeks
Audit fieldwork	1-3 weeks	7-14 weeks
Report delivery	1-3 weeks	8-17 weeks

Accelerated Type I: Organizations with existing security practices (SSO, MFA, code reviews, cloud infrastructure) can complete Type I in as few as six to eight weeks. We have helped clients achieve timelines in the six-week range when the foundational security posture was already strong.

Type II Timeline

Phase	Duration	Cumulative
GRC platform setup and integration	1-2 weeks	1-2 weeks
Policy development and approval	2-3 weeks	3-5 weeks
Control implementation and remediation	2-4 weeks	5-9 weeks
Observation period	6-12 months	7-14 months
Audit fieldwork	2-4 weeks	8-15 months
Report delivery	2-4 weeks	9-17 months

Type I Then Type II (Sequential)

The most common path we recommend: complete Type I first, then transition to Type II.

Phase	Duration	Cumulative
Type I preparation and audit	2-4 months	2-4 months
Type I report delivery	1-3 weeks	2.5-4.5 months
Begin Type II observation (immediately)	Day 1 after Type I	2.5-4.5 months
Type II observation period	6-12 months	8.5-16.5 months
Type II fieldwork and report	1-2 months	9.5-18.5 months

The total timeline from first action to Type II report is nine to nineteen months when sequencing Type I before Type II. The Type I report is available at the three-to-five-month mark, providing an interim deliverable to share with customers. We recommend this path for most organizations because that interim deliverable often unblocks revenue during the observation period.

Directly to Type II

Phase	Duration	Cumulative
Preparation and implementation	2-4 months	2-4 months
Observation period	6-12 months	8-16 months
Fieldwork and report	1-2 months	9-18 months

Going directly to Type II saves two to four months by skipping the Type I engagement, but there is no interim report to share during the observation period. We generally only recommend this path for organizations without active deal pressure.

Buyer Acceptance Data

Enterprise Buyer Preferences

Metric	Type I	Type II
Accepted by enterprise procurement	Yes, with limitations	Yes — gold standard
Accepted as a permanent solution	Rarely — buyers expect Type II within 12 months	Yes — annual renewal expected
Acceptance rate for initial vendor evaluation	70-85%	95-100%
Acceptance rate for contract renewal	20-40%	95-100%
Common buyer response	"Acceptable for now; when will you have Type II?"	"This meets our requirements"

When Type I Is Sufficient

Based on what we see across our client base, Type I reports are generally accepted in these scenarios:

• Initial evaluation: Enterprise buyers evaluating your platform for the first time may accept Type I with a stated timeline for Type II
• Startup sales: Earlier-stage buyers may accept Type I as sufficient security attestation
• Short-term contracts: One-time engagements or short-term contracts may not require Type II
• First SOC 2 report: Buyers understand that Type I is the standard first step toward Type II

When Type II Is Required

In our experience, Type II is effectively required in these scenarios:

• Enterprise contract renewals: Buyers that accepted Type I initially will expect Type II for renewal
• Regulated industries: Financial services, healthcare, and government buyers typically require Type II
• Subservice organization evaluation: Downstream auditors reviewing your report for their clients' SOC 2 audit expect Type II
• Long-term enterprise partnerships: Strategic partnerships and large enterprise contracts require Type II as a baseline

Adoption Statistics

Metric	Value
Percentage of first-time organizations that start with Type I	55-65%
Percentage that go directly to Type II	35-45%
Average time from Type I to beginning Type II observation	Immediately to 2 months
Percentage of Type I organizations that upgrade to Type II within 12 months	80-90%
Most common Type II observation period for first audit	6 months
Most common Type II observation period for mature programs	12 months

The majority of first-time organizations start with Type I because it provides the fastest path to a shareable report. Nearly all of them transition to Type II within the first year. This matches what we recommend — Type I gets you a deliverable quickly, and the investment carries forward into Type II.

Decision Framework

Choose Type I First If:

• You need a SOC 2 report within three months to unblock enterprise deals
• You are pursuing your first SOC 2 engagement and want an interim deliverable while building toward Type II
• Your customers are willing to accept Type I with a stated Type II timeline
• Budget constraints require spreading costs across two audit cycles rather than one larger engagement

Go Directly to Type II If:

• You do not have immediate customer pressure for a report (no deals blocked today)
• Your security program is already mature with established controls
• You want to avoid the cost of a separate Type I engagement
• Your target customers require Type II and will not accept Type I even temporarily

The Recommended Path for Most Organizations

1. Months 1-3: Complete Type I preparation and audit (cost: $30,000-$80,000)
2. Month 3-4: Receive Type I report; share with customers as interim evidence
3. Month 4: Begin Type II observation period (controls continue operating)
4. Month 10-16: Complete Type II fieldwork and receive report (incremental cost: $10,000-$50,000)
5. Ongoing: Annual Type II renewal

This path provides a report in hand at month three and the gold standard Type II report within twelve to sixteen months — all while building on the same control infrastructure. The incremental cost of Type II after Type I is significantly less than a standalone Type II engagement because the compliance program, policies, controls, and evidence infrastructure are already in place.

Key Takeaways

• We consistently see Type I come in at $30,000-$80,000 over eight to twenty-two weeks, while Type II runs $50,000-$150,000 over nine to eighteen months — the observation period is the primary cost and timeline driver
• In our experience, Type II auditor fees run twenty-five to fifty percent higher than Type I due to the extended testing requirements across the observation period
• What we tell clients about buyer acceptance is straightforward: enterprise buyers will accept Type I for initial evaluation, but they will require Type II for renewals and long-term partnerships
• We see fifty-five to sixty-five percent of first-time organizations start with Type I, and eighty to ninety percent of them upgrade to Type II within twelve months — which aligns with what we recommend
• The path we advise for most organizations is Type I first (report in hand at month three) followed immediately by the Type II observation period
• The incremental cost of upgrading from Type I to Type II is $10,000-$50,000 — significantly less than a standalone Type II, which is why the sequential approach makes financial sense
• Going directly to Type II saves two to four months but provides no interim report for customer sharing — we only recommend this when there is no active deal pressure
• Type II with a twelve-month observation period is the gold standard that enterprise buyers, regulated industries, and downstream auditors expect — and what we help clients plan toward from day one

Frequently Asked Questions

Is the cost of Type I wasted if we are going to do Type II anyway?

What we tell clients is no — and the data backs it up. The Type I investment establishes your entire compliance infrastructure: GRC platform, integrations, policies, controls, evidence collection, and auditor relationship. All of this carries forward directly into Type II. The Type I-specific cost that does not carry forward is only the auditor's Type I attestation fee (typically $15,000-$40,000). Everything else — platform setup, control implementation, policy development — serves both engagements. In our experience, the Type I report also provides immediate value by unblocking customer conversations during the months you are building toward Type II, which often justifies the fee on its own.

How much cheaper is it to go directly to Type II instead of doing Type I first?

Based on what we see, going directly to Type II eliminates the Type I auditor fee ($15,000-$40,000), saving that amount. However, you lose the interim deliverable (the Type I report) that can be shared with customers during the six-to-twelve-month observation period. What we advise is this: for organizations without immediate customer pressure, the savings are real and worth capturing. For organizations that need a report to close deals now, the Type I investment is justified by the revenue it enables during the observation period. We help clients model this tradeoff against their actual pipeline.

Do customers ever reject Type I reports?

In our experience, yes — some enterprise customers in regulated industries (financial services, healthcare) require Type II and will not accept Type I under any circumstances. However, what we see more often is that most enterprise procurement teams accept Type I for initial vendor evaluation, particularly when accompanied by a stated timeline for Type II completion. What we always coach clients on is communicating your Type II timeline proactively rather than waiting for the customer to ask. That proactive communication makes a significant difference in buyer confidence.

What is the shortest Type II observation period buyers accept?

What we tell clients is that three months is the absolute minimum for a Type II observation period, and some auditors will perform engagements with this timeline. However, based on what we see in buyer conversations, three-month observation periods receive more scrutiny from sophisticated buyers who may view them as insufficient for demonstrating sustained control effectiveness. We recommend six months as the practical minimum that enterprise buyers accept without question. Twelve months is the gold standard for mature programs, and what we help clients plan toward for their second and subsequent Type II cycles.

Can we use the same auditor for both Type I and Type II?

Yes, and we strongly recommend it. In our experience, using the same auditor for both engagements creates meaningful efficiency because the auditor is already familiar with your control environment, system description, and evidence organization. Most auditors offer modest pricing advantages for organizations that commit to both Type I and Type II engagements. What we advise is to engage your auditor before Type I with the explicit expectation that they will also perform the Type II audit — this sets up the relationship correctly from the start and typically results in better pricing.