The 60-second answer
An extension is anything that registers to the phone system, not anything with a person attached. Count staff, then add shared handsets, common-area phones, and every analogue device. One person with three devices is still one extension. Size to roughly eighteen months out; bands are ceilings, not commitments.
The question that gets answered wrong
"How many extensions do you need?" sounds like a headcount question, so people answer with headcount. Then the system goes live and the fax line has nowhere to go, the warehouse phone is unreachable, and nobody thought about the elevator.
Technically, an extension is an endpoint that registers to the phone system — the mechanism defined in the SIP standard by which a device tells the PBX where it is and what it answers to [1]. Anything that registers is an extension. Anything that needs to be dialled or needs to dial out has to register. People are only one category of those things.
The seven categories to count
- Staff with an assigned phone. The obvious one. One per person, regardless of device count.
- Shared handsets. The warehouse, the kitchen, the shop floor, the loading dock. No individual owns them; each is still an extension.
- Common-area phones. Reception, boardrooms, hallways, the phone by the back door.
- Analogue devices. Fax, alarm dialler, elevator phone, door intercom, overhead paging. Each connects through an adapter and occupies an extension.
- Departments rather than people. Sales, support, dispatch — where you want a number that rings a group. The group itself does not consume an extension, but any dedicated device does.
- Remote and field staff. Softphones and mobile apps count exactly like desk phones. A field technician with only an app is a full extension.
- Spares. The desk that turns over, the seasonal hire, the phone in the storeroom. Two or three is normal and worth having configured.
The most reliable sizing method is not a spreadsheet. It is walking the building and counting things that plug in.
Worked example: a 22-person business
| Category | Count |
|---|---|
| Office staff with desk phones | 16 |
| Field staff, mobile app only | 6 |
| Warehouse shared handsets | 2 |
| Reception + two boardrooms | 3 |
| Fax, alarm, elevator | 3 |
| Spares | 2 |
| Total extensions | 32 |
Headcount 22, extensions 32 — a 45 per cent gap, and this is a typical rather than extreme case. On per-seat pricing at $30, the difference between quoting headcount and quoting reality is $300 a month you did not budget for. On flat bands it is the difference between the 25 band and the 50 band, which is a real decision but a single one made once.
Where the band boundaries actually bite
Canadian business-size distribution clusters heavily at the small end [2], which is why the band boundaries sit at 10, 25, 50 and 100. Most businesses live comfortably inside one and never think about it again. The ones who need to think are those sitting within two or three extensions of a ceiling.
- At 8 or 9 with hiring plans: you will cross 10 within the year. Size at 25 and stop worrying; the difference is $120/month and it buys you fifteen extensions of headroom.
- At 23 or 24 and stable: stay at 25. There is nothing to gain from going higher.
- At 26: you are in the 50 band and paying for headroom you do not use, which is the honest weakness of banded pricing. It is worth asking whether two of those extensions are genuinely needed — often the spares and a disused fax can come out.
- At 48 and growing: take the 50 band and plan the conversation for renewal, not now.
All figures are CAD before GST/HST, which applies at your provincial rate [4] and is identical across bands, so it does not affect which band to choose.
Devices are not extensions, and this saves real money
The single largest source of overpayment in per-seat phone pricing is charging per device. A salesperson with a desk phone, a laptop softphone and a mobile app is three seats on many bills and one extension here — same number, same voicemail box, all three ring together.
This changes hardware decisions too. Because handsets are Class 8 depreciable property at 20 per cent declining balance [3], buying a desk phone is a capital decision with a multi-year life. If a field technician works entirely from an app, there is no reason to buy them a desk phone to satisfy a licensing model.
Three situations that complicate the count
Seasonal swings
A landscaping company at 14 extensions in February and 34 in July has a genuine problem with any pricing model. Flat bands handle it better than per-seat, because you size once at the summer peak and pay the same in winter rather than adding and removing paid seats twice a year. The 50 band at $399 across twelve months usually beats per-seat billing that spikes for five of them, and it removes the administrative churn entirely.
Multiple locations
Two offices on one phone system is one extension count, not two. Extensions from both sites register to the same platform, dial each other by short number, and share one auto-attendant. This frequently moves a business down a band relative to running separate systems, since neither site needed its own spares, its own reception phone, or its own minimum.
Contractors and part-time staff
Someone working two days a week still needs a number that reaches them and a voicemail box, so they are a full extension. What they may not need is a desk phone. If several part-time people share a desk, one handset plus individual softphone logins covers it — each person keeps their own extension and voicemail, and the hardware is bought once.
Counting is also a security control
An accurate extension list is, in security terms, an inventory of devices and accounts — both named directly in federal baseline controls for small and medium organizations [5]. The version of this that goes wrong is not overcounting. It is extensions that belong to people who left eighteen months ago, still registered, still holding a voicemail box collecting customer messages.
That is a safeguards question as much as a housekeeping one, since voicemail is personal information requiring protection appropriate to its sensitivity [6]. Removing an extension and its voicemail box belongs on your staff departure checklist beside the building key and the email account. A useful side effect: doing that hygiene properly often drops a business back under a band ceiling.
How to do the count in one pass
- Export your payroll or staff list. That is your floor, never your answer.
- Walk every floor and note each physical handset, including ones nobody uses.
- Find the analogue devices — check the elevator, the alarm panel, the fax, the paging amplifier.
- Ask who works remotely and would need a softphone or app.
- Add two or three spares.
- Subtract extensions belonging to departed staff.
- Compare the total to 10, 25, 50, 100 and take the band above it.
Bottom line
Count devices that register, not people who are employed [1]. Expect the true number to exceed headcount by roughly a fifth to a half, mostly because of shared handsets and analogue equipment. Bands are ceilings, so growth inside one is free, and crossing one is a renewal conversation rather than an invoice surprise: $99, $219, $399 and $699 CAD per month at 10, 25, 50 and 100 extensions, plus HST.