Many companies are required to appoint a Data Protection Officer (DPO) under the GDPR and BDSG. But the key question is: should it be an internal employee or an external service provider? This decision has major cost and effectiveness implications. This article offers a detailed cost comparison between internal and external DPOs to help you choose the best option for your business.

Key Points at a Glance

  • Legal Requirement: GDPR & BDSG require many companies to appoint a DPO.

  • Cost Factors: External DPO costs vary (provider, scope); internal DPOs incur salary, training, literature & opportunity costs (working time).

  • Expertise: External DPOs bring specialized, up-to-date knowledge.

  • Flexibility: Contracts with external providers are often more flexible than employment contracts.

  • Liability: External DPOs usually assume liability for their advice.

  • Additional Services: External DPO service packages can include website checks, audits, or training.


External DPO Costs: What Influences the Price?

External DPO pricing is usually not fixed and depends on:

  • Company Size & Staff Count: More employees often means more complex data processing.

  • Industry: Some industries (e.g., healthcare) face higher data protection demands.

  • Data Volume & Complexity: Depends on how much personal data is processed and how complex it is.

  • Scope of Services: Advisory only vs. full implementation of a data protection management system.

Small businesses with minimal data processing usually pay lower monthly fees than medium or large ones. Extra costs may arise for initial audits, employee training, or customized consulting. Many providers offer transparent monthly rates or bundled packages.


Advantages of an External DPO: Expertise & Predictability

  • Deep Expertise & Up-to-date Knowledge: External DPOs are legal data protection specialists and stay trained—costs are included in their fees.

  • Transparent Cost Structure: Monthly or annual fees are predictable and clear.

  • High Flexibility: Contracts can often be adapted as needs change (e.g., scaling with growth).

  • Liability Assumption: External DPOs generally take responsibility for their advice, reducing business risk.

  • No Special Employment Protection: Unlike internal DPOs, they don’t come with complex termination rules.

  • Focus on Core Tasks: Your staff won’t be distracted by complex data protection duties.


The True Costs of an Internal DPO: More Than Just Salary

An internal DPO, often a current employee, may seem cheaper at first glance—but consider these factors:

  • Salary & Payroll Costs: Partial salary + social security contributions for the DPO role.

  • Training Costs: Certification and mandatory annual training are significant.

  • Literature & Tools: Ongoing costs for legal materials, articles, and possibly DPO software.

  • Time Commitment: Time spent on DPO tasks takes away from their regular duties (opportunity cost).

  • Special Termination Protection: Internal DPOs are difficult to dismiss, reducing flexibility.

  • Liability Issues: The company bears most of the responsibility if internal DPOs make mistakes.


Conclusion: External DPOs Are Often the More Cost-effective and Safer Option

Even if monthly fees seem higher, external DPOs often prove to be more economical when considering:

  • Savings on training and literature

  • Less internal work disruption

Plus, you benefit from:

Modern providers offering audits and employee e-learning options make this choice even more appealing. A thorough comparison of all direct and indirect costs is key to making an informed decision between an internal or external DPO.

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