A person costs far more than their salary
Fully loaded cost is salary plus 25–40% for payroll taxes, benefits, equipment, software, and space — plus recruiting, typically 15–25% of first-year salary. A $72,000 hire really costs about $108,000 in year one. Comparing an AI build against base salary alone will always flatter the human option.
AI reduces headcount, it rarely eliminates it
Coverage of 70% still leaves 30% of the work — plus review, exception handling, and someone to maintain the system. The honest framing is almost never 'AI instead of a person'; it's 'one person plus AI instead of three people'. Model the residual explicitly, as this calculator does.
- • Count the people needed for exceptions and quality review.
- • Add ops cost — someone owns the pipeline when it breaks.
- • Remember humans absorb novel work; AI systems must be rebuilt for it.
- • Factor morale and knowledge loss, which no model prices.
Flexibility cuts both ways
People are expensive but adaptable — a new process is a conversation. AI systems are cheap per task but rigid; a changed process is a rebuild. If your workflow is still evolving, hiring buys optionality that an automation cannot. Automate what has stabilised.
Related guides
Long-form playbooks on the same topic, written by the RevenueLab editorial team.
FAQ
Is AI cheaper than hiring someone?
At high, stable volume with well-defined tasks, usually yes — often 40–70% cheaper per task at steady state. At low volume, or where the work is varied and judgement-heavy, hiring is typically cheaper once you count build cost, ops, and the residual headcount AI can't replace.
What's the fully-loaded cost of an employee?
Base salary plus 25–40% for taxes, benefits, equipment, software, and facilities. Add 15–25% of first-year salary for recruiting. A $72,000 salary lands near $94,000 ongoing and about $108,000 in year one.
How many tasks can one person handle per month?
Roughly (productive weeks × 37.5 hours × 60) ÷ minutes per task ÷ 12. At 44 productive weeks and 12 minutes per task, that's about 690 tasks a month — much lower than the naive 2,080-hour calculation suggests.
Can AI fully replace a role?
Rarely and only for narrow, highly repetitive roles. Most deployments cover 50–85% of task volume, leaving exceptions, quality assurance, and system maintenance to people. Plan for a smaller team, not no team.
What should I include in AI ops cost?
Engineering time for monitoring and fixes, evaluation and testing, model or vendor changes, incident response, and the tooling around it. A realistic figure is 15–25% of the original build cost per year.
How risky is betting on AI instead of a hire?
The main risks are coverage shortfall (AI handles less than modelled), maintenance drag, and process change forcing a rebuild. Mitigate by piloting on a slice of volume first and keeping the human path warm until coverage is proven in production.
How this calculator is built
Independently maintained
Written by Sam Doshi and the RevenueLab editorial team. We don't sell the data feeds this tool is built on.
Sourced from primary data
Benchmarks come from public AdSense / Stripe / IRS disclosures and reader-submitted data — never third-party "$X per view" claims. Full methodology.
Last editorial review
Reviewed on a rolling quarterly cycle. Dated reviews are published on the methodology record for each calculator.
Editorial standards
See our editorial policy and disclaimer. Results are estimates, not advice.