Can I Afford to Hire Calculator
See the true, fully loaded cost of a new hire and exactly how much revenue the role needs to generate to pay for itself at your margin.
A new hire costs far more than their salary. Once you add payroll taxes, unemployment, workers' comp, and benefits, the fully loaded cost is meaningfully higher — and that's the number you actually have to cover with revenue. This calculator shows the true annual and monthly cost of a hire, and how much revenue the role needs to generate to pay for itself at your margin.
Enter the basics below. If you can estimate the additional revenue the hire will bring in, you'll also see the net monthly impact and how long it takes to earn back your onboarding cost.
Can I Afford to Hire? Calculator
Updates live as you change any number.
Payroll taxes, unemployment, workers' comp (default 10%)
Health insurance, retirement match, etc. (default $0)
Laptop, software, recruiting, training (default $0)
Share of revenue left after direct costs (default 50%)
New revenue this hire will generate per month
Fully Loaded Annual Cost
$7,750/month — base salary plus 12% burden and $9,000 benefits
What It Costs You
Revenue Needed to Break Even
At a 50% gross margin, only 50¢ of each revenue dollar is left to cover the hire — so you need this much in sales to pay for the role.
One-Time Onboarding & Equipment
A separate upfront cost, not part of the recurring annual cost above
This hire pays for itself if you can generate at least $15,500/month in added revenue ($186,000/year) at your current margin.
This hire is cash-flow positive at your estimate
Based on $18,000/month in added revenue at a 50% margin ($9,000/month in gross profit) against the $7,750/month loaded cost.
Net Monthly Impact
+$1,250
gross profit added minus loaded cost
Onboarding Payback
4.0 mo
to earn back $5,000
Fully loaded cost = base salary × (1 + burden%) + annual benefits. Revenue needed = fully loaded cost ÷ your gross margin. The one-time onboarding cost is shown separately because it isn't a recurring expense.
How the Math Works
Cost:
Fully loaded annual = Base salary × (1 + Burden% ÷ 100) + Benefits
Monthly loaded = Fully loaded annual ÷ 12
Break-even:
Revenue needed = Fully loaded annual ÷ (Margin% ÷ 100)
With projected revenue:
Monthly contribution = (Expected revenue × Margin%) − Monthly loaded cost
Payback months = Onboarding cost ÷ Monthly contribution
The key insight is the margin. A hire isn't paid for out of revenue — it's paid for out of the gross profit that revenue produces. If your margin is 50%, every dollar of fully loaded cost needs two dollars of revenue behind it. The lower your margin, the more revenue each hire has to drive.
What Goes Into the True Cost
Payroll Burden
The employer's share of Social Security and Medicare, federal and state unemployment insurance, and workers' compensation. This is mandatory and typically adds 10–15% on top of base salary.
Benefits
Health insurance, retirement matching, paid time off, and other perks. These vary widely and are entered as a separate dollar amount so you can model exactly what you offer.
One-Time Onboarding & Equipment
Laptop, software licenses, recruiting fees, and ramp-up training. It's a real cash outlay but a one-time one, so it's kept separate from the recurring annual cost and used to compute payback.
A Few Things to Keep in Mind
- This is an estimate to help you think through the decision — not a forecast or financial advice.
- Payroll burden and benefits vary by state, role, and the coverage you offer — use your real numbers for accuracy.
- It assumes a steady gross margin; in practice a new hire may ramp up slowly before reaching full productivity.
- It doesn't account for overhead beyond direct costs, raises, bonuses, or the revenue risk if the hire doesn't work out.
Not Sure If the Timing's Right?
We'll look at your actual cash flow, margins, and pipeline and model the hire against your real numbers — so you know whether you can afford it now or what needs to happen first.
Frequently Asked Questions
What does 'fully loaded cost' mean?
It's the true cost of an employee, not just their salary. On top of base pay you also pay payroll taxes, unemployment insurance, workers' comp, and benefits. The payroll burden percentage captures the mandatory employer costs, and the benefits field adds things like health insurance and retirement contributions.
How much revenue does a new hire need to generate?
Enough to cover their fully loaded cost at your gross profit margin. If a hire costs $100,000 fully loaded and your margin is 50%, you need about $200,000 in revenue to break even on the role — because only half of each revenue dollar is left after direct costs to put toward the salary.
What's a typical payroll burden percentage?
For payroll taxes, unemployment, and workers' comp it's often around 10–15%, though it varies by state, role, and industry. Benefits such as health insurance, retirement matching, and paid time off are on top of that — which is why this calculator lets you enter benefits as a separate dollar amount.
Should I hire if the payback period is long?
A long payback period isn't automatically bad — some roles build long-term capacity that pays off over years. But a long payback does strain cash flow in the meantime. Make sure you have the runway to cover the gap between when you start paying the hire and when their revenue catches up.