NI, pension, benefits on top of salary.
Software, equipment, desk, etc.
Additional sales this hire drives once up to speed.
Once up to speed the hire adds £1,000 a month, and pays back the ramp-up cost around month 5. On these numbers, the hire stacks up.
Cumulative net cash impact
Where the line crosses zero is when the hire has paid back.
How to decide if you can afford a hire
The salary is only part of the cost. Add employer on-costs (National Insurance, pension, insurance) and the overheads each person carries (software, equipment, space). Then compare that fully-loaded cost to the gross profit the hire generates — extra revenue times your margin, not revenue alone.
Monthly cost = Salary × (1 + on-costs %) ÷ 12 + overhead
Monthly gross profit = Extra revenue × gross margin %
Net impact = Gross profit − Monthly cost
Why the ramp matters
Almost no hire is fully productive on day one. The ramp models the weeks it takes to get there, so the payback month reflects reality rather than best case. If a hire only pays back over a long horizon, that's not necessarily a no — but it should be a deliberate investment, not a surprise.
Frequently asked questions
What should I use for employer on-costs?
On-costs are what you pay on top of gross salary — employer National Insurance, pension contributions, and often insurance or benefits. A common rule of thumb is 15–25% of salary; adjust to your own figures.
Why use gross margin instead of revenue?
Revenue isn't profit. If a hire brings in extra sales but those sales cost money to deliver, only the margin is left to cover their cost. Using gross margin gives a truthful view of whether they pay for themselves.
What if the hire is a cost centre, not revenue-generating?
For roles that don't drive revenue directly (admin, support), set expected revenue to the value they free up or save, or treat this as a pure affordability check against your cash flow forecast.
This calculator gives you one number. FinanceMOT gives you the whole picture.
Get a 0–100 financial health score, RAG-flagged KPIs across all four pillars, and plain-English actions — in under two minutes. No finance degree required.
More calculators
These calculators are for general guidance only and use the figures you enter. They are not financial, accounting or tax advice. Always check important decisions with a qualified professional.