calculator

Employee Affordability Calculator

Estimate the full first-year cost of a hire and the revenue needed to cover it.

Who it is for: UK self-employed tradespeople and small trade contractors.

What you get: Monthly cost, year-one cost, contribution and break-even chargeable hours.

How this calculation works

This tool runs in your browser. No data is sent to our servers. Below are the assumptions used.

Employer NI and pension percentages are entered by you — rates change, so confirm current figures with an accountant.
Supervision time is costed at your hourly rate because it replaces billable work.

Your figures

Live

Direct employment cost£40,120.00
Salary £34,000.00 + employer NI £5,100.00 + pension £1,020.00. Holiday of 5.6 weeks is already inside the salary but removes chargeable hours.
Kit, van, training and insurance£8,100.00
Tools and PPE, training and certification, vehicle and insurance uplift.
Your supervision time£6,210.00
3 hrs/week × 46 weeks × £45.00. Hours you no longer bill.
Year-one cost£54,430.00
Employment cost plus kit plus supervision.
Monthly cost£4,535.83
Year-one cost ÷ 12. This has to be covered every month, in cash.
Revenue they should generate£54,600.00
1300 chargeable hours × £42.00 charge-out rate.
Year-one contribution£170.00
Revenue less total cost. Negative means the hire is subsidised by the rest of the business.
Break-even chargeable hours1296.0 hrs
About 28.2 chargeable hours a week for 46 weeks just to cover the cost.

Cash matters as much as profit: wages are paid weekly or monthly regardless of when customers pay. Check the hire against a 13-week cash-flow forecast, not just an annual figure.
Employer National Insurance, pension duties, holiday entitlement and employment status rules change. Confirm current rates with an accountant before committing.

How this is worked out

Employer NI and pension percentages are entered by you — rates change, so confirm current figures with an accountant.
Supervision time is costed at your hourly rate because it replaces billable work.

Results are planning aids based on figures you enter. They are not financial, tax or legal advice, and no price is guaranteed to be accepted.

Hypothetical worked examples

To help you understand the outputs, here are illustrative examples generated using the same logic.

Illustrative example 1: A sole trader working 30 billable hours per week with £18,000 in annual overheads needs to recover £11.54 per hour before any profit is added. If they want a £35,000 target owner pay before personal tax, the true hourly rate rises to around £28–£32 based on the inputs entered.

Illustrative example 2: A small team with a van, premises and two employees requires a higher day rate to cover shared operational costs. The calculator shows the break-even point clearly so the business owner can set a rate that covers all costs before profit is considered.

Where this fits

Growing a Trade Business Beyond Your Own Labour