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 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. And carry it you will: a salaried hire is the purest form of a fixed cost, arriving every month whether revenue does or not; why that distinction decides so much is laid out in fixed vs variable costs.
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.
This page prices one hire. To cost a whole team — hourly and salaried staff together, with overtime — use the labor cost calculator, and to sanity-check the total against what the business earns, the payroll percentage calculator turns it into a share of revenue.
A worked example
A €60,000 offer in a country with 25 percent employer contributions, modest benefits, and an agency doing the search:
| Line | Amount / year | Where it comes from |
|---|
| Base salary | €60,000 | The offer letter |
| Employer taxes and contributions | €15,000 | 25% of salary, statutory |
| Benefits | €3,600 | Health top-up, pension match |
| Equipment and software | €2,400 | Laptop amortised, seats |
| Ongoing cost | €81,000 · 1.35× salary | €6,750 a month |
| Recruiting (year one only) | €12,000 | 20% agency fee |
| First-year cost | €93,000 · 1.55× salary | What the bank account sees |
The candidate hears €60,000. The company pays €93,000 in year one and €81,000 every year after, and the €21,000 recurring gap is dominated by one line — employer taxes — that never appears on a payslip. Run the same offer through the calculator above with your own country’s rate, because that single input moves the answer more than every other field combined.
Can I afford to hire?
The loaded cost tells you what the hire is; only runway tells you whether you can carry it. Fill in the optional cash and burn fields above and the calculator answers in months rather than euros, which is the unit the decision is actually made in. A workable rule of thumb: above 12 months of runway after the hire, the question is whether the role pays for itself, not whether you can afford it. Between 6 and 12, affordable if you can name what the hire must produce and by when. Below 6, the hire and the next fundraise have become the same decision.
Two checks worth running before committing: a cash flow forecast with the new cost in it, which shows the month the decision bites rather than the average, and your own pay, which belongs in the burn like any other salary — the framework for that is in founder salary: how much to pay yourself.