Plainhub
Free tool

Employee cost calculator

What a hire actually costs once employer taxes, benefits, equipment and recruiting are in the number, and how many months of runway that decision spends. Nothing stored.

The hire
Your position (optional, for the runway answer)
True monthly cost
€7,650
ongoing, after year one
First-year cost
€99,800
includes recruiting
Cost multiplier
1.31x
of base salary
Runway cost
2.0
months lost

This hire takes you from 11.4 months of runway to 9.4. That still leaves room, but it puts the next raise inside the next year, which is worth deciding deliberately rather than discovering later.

The formula

employer taxes   = salary x employer tax rate
ongoing cost     = salary + employer taxes + benefits + equipment
first-year cost  = ongoing cost + recruiting
monthly cost     = ongoing cost / 12
cost multiplier  = ongoing cost / salary
runway cost      = cash / burn  −  cash / (burn + monthly cost)

The multiplier is the part people quote, usually as 1.25 to 1.4 times salary. It is a reasonable sanity check and a poor decision tool, because it says nothing about whether you can carry the cost.

The last line is the one that decides hires. A €6,000-a-month person is affordable at a €35,000 burn with two years of cash and reckless at the same burn with seven months. Same cost, different answer, and only the runway calculation tells you which you are in. The wider argument is in what a hire really costs.

One caution on employer taxes: the rate varies enormously by country, from roughly 8 percent to over 40. Use your own figure rather than a benchmark, because this input moves the total more than anything else on the form.

Common questions

How do you calculate the true cost of an employee?

Start with base salary, then add employer taxes and social contributions, benefits, and the equipment and software they need. Recruiting is a one-off, so count it in year one only. Total employee cost = salary + employer taxes + benefits + tools, with recruiting added to the first year.

What is the employee cost multiplier?

Loaded cost divided by base salary. In most markets it lands between 1.25 and 1.4, meaning a €70,000 salary costs €87,500 to €98,000 a year. It varies widely by country, because employer contributions do.

What is included in fully loaded employee cost?

Salary, employer payroll taxes and social security, pension contributions, health and other benefits, equipment, software seats, and a share of recruiting. Some companies also allocate office and overhead, which makes the number larger but harder to compare.

How much does a hire cost in runway?

Divide your cash by your burn before and after the hire, and take the difference. That is the honest cost of the decision. A €6,000-a-month person on a €35,000 burn with €400,000 in the bank takes runway from 11.4 months to 9.8, so the hire costs about 1.6 months.

Should I include recruiting fees?

In year one, yes. An agency fee of 20 percent of salary is real cash leaving the bank in the month you hire, and leaving it out makes the first year look cheaper than it is. From year two it disappears, which is why this calculator shows both figures.

Should founder salary be counted the same way?

Yes. If you pay yourself, you are an employee cost like any other, and leaving it out produces a burn figure the company can hit while you personally earn nothing.

One hire is a calculation. A team is a model.

Plainhub keeps your whole team cost live by department, and shows what every hire does to runway before you commit it. Draft the decision, see the runway hit, then decide.

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