Hiring impact on runway calculator
See how a planned hire changes monthly cash and runway.
Your inputs
Your results
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Compare two scenarios.
Run the tool, then save A or B to compare headline results and entered values. Keep currencies, periods and assumptions consistent.
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Run the tool to save your first scenario.
How it works
Compare the same cash plan with and without one proposed hire. Cash runway measures the time until cash is depleted; net burn is monthly cash expenses less monthly cash revenue. This scenario adds salary, employer overhead and upfront recruiting costs to that baseline. Reference: Carta’s burn-rate definitions at https://carta.com/learn/resources/burn-rate-calculator/.
A few things to know
Constant revenue and baseline expenses, one hire, no future financing, no revenue uplift from the hire, and no inflation or salary increases. Monthly cash flow is assumed even, so actual payroll and invoice timing can create earlier cash shortages. Use one currency throughout. This is a planning estimate, not a solvency assessment; the projection is capped at 120 months and outputs are rounded for display.
Results use your inputs. Keep all money amounts in the same currency.
When to use this tool
A salary offer affects cash through more than the annual headline amount. Employer overhead adds recurring cost, recruiting adds an upfront payment, and the hire’s start month determines when those amounts begin. This hiring runway calculator compares one baseline cash plan with the same plan plus one hire. It shows loaded monthly cost, projected balances and the first time cash reaches zero within the selected horizon. It assumes no extra revenue from the hire, making the cost scenario explicit before you evaluate its expected benefits.
- Compare current cash runway with a proposed salary and employer-overhead assumption.
- Test a later start month or different hiring cost before committing to a cash plan.
- Export baseline and hiring balances to discuss the funding needed for one additional role.
How to use hiring impact on runway calculator
Establish the baseline
Enter Starting cash, Monthly cash revenue and Baseline monthly cash expenses. Exclude the proposed hire from baseline expenses and use collected cash rather than invoices.
Add the hire’s costs and timing
Enter Hire annual salary, Employer overhead (%), One-time hiring costs and Hire start month. The upfront amount is paid at the start of that month.
Compare both scenarios
Choose Projection horizon (months), with the hire starting inside it. Review runway, loaded monthly cost and the closing-cash table; download the scenario if needed.
A month-three hire shortens the cash window
Inputs
Starting cash 100,000; monthly revenue 10,000; baseline expenses 20,000; salary 60,000; overhead 20%; upfront costs 5,000; start month 3; horizon 12.
Result
Baseline runway is 10 months. Loaded hire cost is 6,000.00 per month. Hiring runway is 6.69 months, a 3.31-month reduction. Additional spend over the horizon is 65,000.00 and hiring cash at month 12 is −85,000.00.
What it means
Two baseline months leave 80,000. Upfront hiring costs reduce that to 75,000 at the start of month three. The new 16,000 monthly net outflow then consumes it over 4.6875 more months.
Common mistakes to avoid
Counting salary in the baseline
The model adds the proposed hire separately. A baseline already containing that hire’s salary would double-count the expense.
Treating the salary as the loaded cost
Benefits, employer charges and recurring costs can increase the monthly amount. Enter an overhead assumption appropriate to your situation rather than adopting the example rate.
Reading beyond-horizon as unlimited
A balance that stays positive in the chosen window only proves no modeled depletion inside that window.
Frequently asked questions
Definitions, edge cases, and practical next steps for this tool. Search all tool FAQs ↗
How is loaded monthly hire cost calculated?
Annual salary is divided by 12 and multiplied by one plus the overhead percentage as a decimal. A 60,000 salary with 20% overhead becomes 6,000 monthly cost. Overhead is a user assumption; no local employer-tax rates are looked up.
When are one-time hiring costs paid?
They are subtracted at the start of the hire month, before that month’s regular flows. A start month of 3 means after two complete baseline months. If the upfront payment exhausts cash, runway ends at that boundary rather than the month end.
What does fractional runway mean here?
After upfront costs, regular collections and expenses are assumed to flow evenly through each month. The tool interpolates when cash first reaches zero. Actual payroll dates and receipt timing can produce a different practical shortage, so the fraction is a planning approximation.
Why does the schedule continue into negative cash?
Negative balances show the theoretical funding shortfall if the same operations continued. They are not available bank balances. Use them to understand required funding or changes to the plan, rather than assuming the business can continue without additional cash.
Does the hire generate additional revenue in this model?
No. Monthly revenue and baseline expenses stay constant in both scenarios. The hiring case adds only the entered costs. Evaluate productivity or sales benefits separately; do not assume a cost-only scenario forecasts the role’s full economic return.
Why is runway reduction sometimes not determined?
The tool can subtract depletion times only when both scenarios reach zero within the chosen horizon. If either remains positive through that window, its exact depletion time is not established here, so an exact reduction is not reported.
Can I model several hires?
This tool models one start month and one combined recurring salary amount. Hires with different start dates, salaries or upfront payments require a separate detailed forecast. Combining them into one entry would lose the timing differences that affect cash.
What happens if starting cash is zero?
Both scenarios have zero starting runway even if later net flow is positive. That reflects the absence of a present cash buffer. Future collections may arrive after an immediate obligation, which a positive monthly total alone cannot resolve.
Explore the topic in the blog
Sources and method
Use the references below to check definitions and platform guidance. The model’s scope and limits are explained above. Read our editorial standards.