{
  "slug": "tech-hire-breakeven",
  "title": "Technician Hire Breakeven Calculator",
  "heading": "Technician Hire Breakeven Calculator",
  "category": "financial",
  "url": "https://www.revenuelab.fyi/toolbox/tech-hire-breakeven",
  "summary": "How many billable hours a new tech must produce to justify their total cost.",
  "description": "Before adding a technician, the real question isn't 'can we afford the wage,' it's 'do we have enough incremental car count and bay capacity for this person to hit breakeven production.' This calculator takes total loaded cost of a new hire (base pay or guarantee, payroll taxes, benefits, tools/uniform allowance) and your labor gross margin to compute the minimum billable hours per month the tech must produce just to cover their own cost, then compares that to realistic production based on experience level so you can sanity-check the hire against actual available work before extending an offer.",
  "formula": "Breakeven Hours = Loaded Monthly Cost ÷ (ELR × Labor GP%). Compare to Realistic Monthly Hours by experience tier.",
  "dateModified": "2026-09-30",
  "run_url": "https://www.revenuelab.fyi/api/public/calc?tool=tech-hire-breakeven",
  "inputs": [
    {
      "id": "basePay",
      "label": "Monthly base pay or guarantee",
      "kind": "number",
      "hint": null,
      "default": 4800,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "burdenPct",
      "label": "Payroll tax + benefits load",
      "kind": "number",
      "hint": null,
      "default": 22,
      "unit": "%",
      "min": 0,
      "max": 100
    },
    {
      "id": "toolsAllowance",
      "label": "Monthly tools/uniform/training allocation",
      "kind": "number",
      "hint": null,
      "default": 150,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "elr",
      "label": "Shop effective labor rate",
      "kind": "number",
      "hint": null,
      "default": 130,
      "unit": "$/hr",
      "min": 0,
      "max": null
    },
    {
      "id": "laborGP",
      "label": "Labor gross margin (excl. this hire's own pay)",
      "kind": "number",
      "hint": null,
      "default": 68,
      "unit": "%",
      "min": 1,
      "max": 100
    }
  ],
  "outputs": [
    {
      "id": "breakevenHours",
      "label": "Breakeven billable hours/month",
      "format": "decimal",
      "hint": null,
      "primary": true
    },
    {
      "id": "breakevenWeekly",
      "label": "Breakeven billable hours/week",
      "format": "decimal",
      "hint": null,
      "primary": false
    },
    {
      "id": "loadedCost",
      "label": "Total loaded monthly cost",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "revenueNeeded",
      "label": "Labor revenue needed to cover cost",
      "format": "currency",
      "hint": null,
      "primary": false
    }
  ],
  "worked_example": {
    "inputs": [
      "Monthly base pay or guarantee: 4800 $",
      "Payroll tax + benefits load: 22 %",
      "Monthly tools/uniform/training allocation: 150 $",
      "Shop effective labor rate: 130 $/hr",
      "Labor gross margin (excl. this hire's own pay): 68 %"
    ],
    "outputs": [
      "Breakeven billable hours/month: 67.9",
      "Breakeven billable hours/week: 15.7",
      "Total loaded monthly cost: $6,006",
      "Labor revenue needed to cover cost: $8,832"
    ]
  },
  "how_to": {
    "title": "How to use this",
    "steps": [
      "Enter monthly base pay or guarantee ($).",
      "Enter payroll tax + benefits load (%).",
      "Enter monthly tools/uniform/training allocation ($).",
      "Enter shop effective labor rate ($/hr).",
      "Enter labor gross margin (excl. this hire's own pay) (%).",
      "Read your breakeven billable hours/month on the right — it updates as you type.",
      "Hit Share to keep the scenario or send it to someone."
    ]
  },
  "scenarios": [
    {
      "name": "Conservative",
      "description": "Lower-end numbers — what if things land soft?",
      "values": {
        "basePay": 2900,
        "burdenPct": 13,
        "toolsAllowance": 90,
        "elr": 78,
        "laborGP": 41
      }
    },
    {
      "name": "Typical",
      "description": "Defaults — the most common real-world setup.",
      "values": {
        "basePay": 4800,
        "burdenPct": 22,
        "toolsAllowance": 150,
        "elr": 130,
        "laborGP": 68
      }
    },
    {
      "name": "Ambitious",
      "description": "Higher-end numbers — what if things really pop?",
      "values": {
        "basePay": 7700,
        "burdenPct": 35,
        "toolsAllowance": 240,
        "elr": 208,
        "laborGP": 100
      }
    }
  ],
  "limitations": [
    "Results are estimates before tax, fees, and inflation unless an input explicitly covers them.",
    "Rates are treated as fixed for the whole period — variable-rate products will drift from this projection.",
    "This is educational maths, not financial advice. Check anything contractual with the lender or your accountant."
  ],
  "faq": [
    {
      "q": "What's a realistic ramp-up for a new hire's production?",
      "a": "A tech new to the shop, even if experienced elsewhere, typically produces 60-75% of eventual normal output for the first 2-3 months while learning your shop's processes, software, and parts sourcing — budget for a below-breakeven ramp period, not instant full production."
    },
    {
      "q": "Should I include this tech's pay in the labor GP% input?",
      "a": "No — use your labor GP% calculated from the rest of the team excluding this new hire, since including their own cost in the margin used to judge their own breakeven creates a circular, misleading number."
    },
    {
      "q": "What if breakeven hours exceed realistic capacity?",
      "a": "That means you don't have enough car count or bay space to support the hire yet — either fix the car-count/marketing side first, or the hire will run at a structural loss until demand catches up, which owners often discover too late without running this math upfront."
    },
    {
      "q": "Does this apply to hourly (non-flat-rate) techs too?",
      "a": "Yes, same logic — replace flag-hour production with actual hours billed to customers, since an hourly tech who spends half their clocked time on non-billable work has the same breakeven problem as a flat-rate tech running low efficiency."
    }
  ],
  "related": [
    "https://www.revenuelab.fyi/toolbox/technician-efficiency-proficiency",
    "https://www.revenuelab.fyi/toolbox/flat-rate-pay-plan"
  ],
  "license": "CC-BY-4.0",
  "citation": "RevenueLab — Technician Hire Breakeven Calculator (https://www.revenuelab.fyi/toolbox/tech-hire-breakeven)"
}