Can you afford this hire?
A salary is not the cost of a hire. The cost is the loaded salary, plus the months before they contribute anything, measured against the margin you actually keep. This shows all three, and the revenue the hire has to produce before it stops being a subsidy.
That is 35.5% on top of what you bill today, or 5 more clients at $2,500 a month.
What has to be true before this is a yes
- You can add $10,653 a month in new revenue (about 5 more clients), and you can name where it comes from.
- You have $19,175 you are willing to spend before the hire returns anything. That is the ramp, and it is a real cost whether or not the hire works out.
- Your cash carries the role 6.3 months with no new revenue at all, against a 3-month ramp. That is real cover.
- The target is 35.5% of your current revenue. A hire that requires you to grow by a third to stand still is a growth plan wearing a staffing costume. Be sure the growth is already in motion.
- The seat is describable. If you cannot write what this person owns and what “done” looks like, the number above is the smaller of your two problems.
How the numbers work
| Figure | How it’s calculated |
|---|---|
| Loaded monthly cost | salary × (1 + overhead) ÷ 12 |
| Break-even revenue | loaded cost ÷ gross margin |
| Ramp cash | loaded cost × ramp months |
| Months carried | available cash ÷ loaded cost |
The line most owners skip is the margin division. A $6,400 monthly cost at a 60% gross margin does not need $6,400 of new revenue. It needs $10,653, because $4,261 of that revenue leaves again as delivery cost. Divide by your margin or you will hire against a number that was never enough.
Reference: break-even revenue by margin
What a $65,000 salary at 18% overhead requires each month, at different margins.
| Gross margin | Loaded cost / month | New revenue needed / month | Per year |
|---|---|---|---|
| 30% | $6,392 | $21,306 | $255,667 |
| 40% | $6,392 | $15,979 | $191,750 |
| 50% | $6,392 | $12,783 | $153,400 |
| 60% | $6,392 | $10,653 | $127,833 |
| 70% | $6,392 | $9,131 | $109,571 |
| 80% | $6,392 | $7,990 | $95,875 |
The number is downstream of something else
This tells you what the hire costs. It does not tell you whether the hire is the right move, and the two are different questions. Most founders who cannot afford a hire do not have a payroll problem. They have a business where every decision still routes through one person, so the only role that would help is the one they cannot describe well enough to fill.
Work out the number. Then work out whether you are hiring into a seat that exists.
See where hiring sits inside the Four Frameworks →
Gross margin basis. This ignores your existing overhead, taxes and owner draw, so break-even here means the hire pays for itself, not that the business is profitable at that revenue. Ramp assumes zero contribution during the ramp months, which is deliberately conservative. Last updated 13 August 2026.