If I hire my first employee at 4,000 a month, how many extra units must I sell each month to cover the salary?
Enter just the new salary as fixed costs, with your usual selling price and variable cost, and the calculator gives the extra units you must sell each month. At a price of 85 and a cost of 50, a 4,000 salary needs 115 extra units, rising to 132 once you add 600 of monthly costs that come with the hire.
Why run the salary on its own
Whether your shop covers its current costs today is a separate question. Hiring asks a specific one: what new load does this person add? Enter the salary alone as fixed costs in the Break-even calculator and the result is the extra sales that must come on top of what you sell now, just to leave you where you were before the hire.
The salary-only calculation
- Fixed costs: 4,000, the monthly salary.
- Selling price 85 and variable cost 50, as they are in your shop today.
- Result: a contribution of 35, a ratio of 41.18%, and an exact break-even of 114.29, rounded up to 115 extra units a month, with revenue of 9,775 at that volume.
The salary is not the only cost
An employee usually brings other monthly costs: a phone line, transport, an extra software seat, and any insurance or fees that apply in your situation. Check those against the labour rules that apply to you rather than general figures. Say they come to 600 a month:
Enter 4,600 instead of 4,000. Break-even becomes 131.43, rounded up to 132 units, with revenue of 11,220. The extras alone added 17 units to the target. If there are one-off costs such as a laptop or training, spread them over the months you expect the person to stay.
How to read the 132
- Compare it with your current monthly sales. If you sell 400 units, you need growth of about a third. If you sell 1,500, it is a much easier bar.
- Ask whether the hire will help you sell those units, for example by answering customers faster or packing orders so you can focus on marketing. The calculator cannot know that; it only shows the hurdle.
- If the person will work part-time by the hour, log their hours with the Timesheet calculator to get the real monthly pay before entering it.
- Review your current spending by category with the Expense summary generator so you know where the shop stands before adding the salary.
Common questions
Should I add the salary to all my costs and rerun it?
You can, to see the new overall break-even. To see what the hire itself demands, run the salary alone.
The employee will sell products at different prices. What do I enter?
The calculator assumes one product. Use your average order value and average variable cost from recent sales.
Does the tool estimate the sales the employee will add?
No, it does not predict sales. It shows the level growth must pass so the hire does not put the shop into a loss.