CFO

Can I afford to hire someone?

A $60,000 hire costs about $74,000. The question is not whether you can pay them this month — it is whether you can still pay them in month nine, in your worst season.

4 min read August 24, 2026

“Can I afford to hire someone?” is almost never a question about the bank
balance, though that is where most owners look. It is a question about what your
cash position looks like twelve months out, and it can be answered properly in
an afternoon.

What a hire actually costs

The salary is the smallest honest version of the number. A $60,000 hire in the
US typically costs meaningfully more than $60,000.

A $60,000 hire, fully loaded

Line	Annual	Note
Base salary	$60,000
Employer FICA (7.65%)	$4,590	Social Security and Medicare
Federal and state unemployment	$600	Varies by state
Workers’ compensation	$700	Rate depends on the role
Health contribution	$6,000	If offered
Equipment and software	$2,400	First year is heavier
Fully loaded	$74,290	~24% above salary

Before payroll processing, recruitment, and the time you spend training rather than working. A useful planning rule is salary plus 25 to 30%.

The question is not whether you can pay them this month. It is whether you can still pay them in month nine, in your worst season, if nothing improves.

The three tests worth running

1. The runway test

Take your current cash, subtract the new monthly cost from your monthly net
cash flow, and project twelve months at your actual seasonality rather
than an average. Businesses do not earn one-twelfth of their revenue each month,
and the month that breaks a hire is usually the quiet one four months out.

2. The payback test

What does this person have to produce for the hire to pay for itself, and by
when? For a revenue-generating role that is a concrete number. For a role that
buys back your time, the honest version is what you will do with the hours —
“more admin capacity” is not a return, “twelve more client calls a month” is.

3. The reversal test

If it does not work, what does unwinding it cost, and how quickly can you
tell? Ninety days is a reasonable review point. A hire you cannot assess for a
year is a much larger commitment than the monthly cost suggests.

The alternative worth pricing first. Contract or part-time capacity
costs more per hour and far less per year, and it is reversible. For a first
hire in an uncertain season that trade is often the right one — and it is
usually skipped, because a full-time hire feels like the more serious answer.

What makes this answerable at all

Every test above needs the same three things: clean historical figures, costs
separated into fixed and variable, and a sense of your real seasonality. If the
books cannot produce those, the honest answer is that the question cannot be
answered yet — and the fix is a few weeks of work, not a reason to guess.

Questions we get asked

01What does a hire really cost above salary?

Employer FICA at 7.65%, federal and state unemployment, workers compensation, any health contribution, and equipment and software. Salary plus 25 to 30% is a workable planning rule, and the first year runs heavier because of setup.

02Should I hire an employee or a contractor?

Commercially, contract capacity costs more per hour, far less per year, and is reversible — often the right trade for a first hire in an uncertain season. But worker classification is a legal test about control and independence, not a preference, and getting it wrong is expensive. Decide the commercial question first, then check the classification properly.

03How much runway should I keep after hiring?

Enough to cover the new cost through your worst season plus a margin, which for most seasonal small businesses means projecting twelve months at real seasonality rather than an average. The month that breaks a hire is usually the quiet one a few months out, not the first.

04How soon will I know if it was a mistake?

Set the review point before you hire — ninety days is reasonable — and define what you expect to see by then. A hire you cannot assess for a year is a much bigger commitment than the monthly cost implies.

05Can you model this for me?

Yes, this is exactly what the CFO work is for: a rolling twelve-month cash forecast at your real seasonality, with the hire in and out, so you can see both. It needs reliable books underneath it, and we will tell you if yours are not there yet.

Not sure whether this is happening in your books?

Give us view-only access and we will tell you, in plain English, what is misclassified, unreconciled or wrong — within 48 hours. Free, and you are under no obligation to do anything about it.

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