Rex says
Money math without the spreadsheet headache. Plug in your numbers and I'll show you exactly where the dollars land.
Try a scenario
Click to load — tweak from there.Inputs
Result
Lower first-year cost option
Overtime
Overtime annual cost
$32,760
New hire first-year cost
$74,900
Annual difference
$42,140
Breakeven OT hours/week
34.3
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How to use this
- 1Enter overtime hours needed per week.
- 2Enter base hourly rate of existing staff ($).
- 3Enter new hire annual salary ($).
- 4Enter benefits + payroll tax load (%).
- 5Enter one-time recruiting + onboarding cost ($).
- 6Read your lower first-year cost option on the right — it updates as you type.
- 7Hit Share to keep the scenario or send it to someone.
About this calculator
Covering extra workload with overtime avoids hiring costs but pays a 1.5x premium and risks burnout, while hiring a new employee costs more upfront in recruiting, onboarding, and benefits but spreads the workload sustainably. This tool compares the annual cost of overtime hours against the fully-loaded cost of a new hire so you can see which is cheaper at your current volume of extra work.
Worked example
Using the values the calculator loads with:
Inputs
- Overtime hours needed per week: 15
- Base hourly rate of existing staff: 28 $
- New hire annual salary: 55000 $
- Benefits + payroll tax load: 28 %
- One-time recruiting + onboarding cost: 4500 $
Results
- Lower first-year cost option: Overtime
- Overtime annual cost: $32,760
- New hire first-year cost: $74,900
- Annual difference: $42,140
- Breakeven OT hours/week: 34.3
What each field means
Inputs
- Overtime hours needed per week
- The overtime hours needed per week used in the calculation. Starts at 15 so you have a working example on load.
- Base hourly rate of existing staff ($)
- The base hourly rate of existing staff used in the calculation, measured in $. Starts at 28 $ so you have a working example on load.
- New hire annual salary ($)
- The new hire annual salary used in the calculation, measured in $. Starts at 55000 $ so you have a working example on load.
- Benefits + payroll tax load (%)
- The benefits + payroll tax load used in the calculation, measured in %. Starts at 28 % so you have a working example on load. Accepted range: 0–60 %.
- One-time recruiting + onboarding cost ($)
- The one-time recruiting + onboarding cost used in the calculation, measured in $. Starts at 4500 $ so you have a working example on load.
Results
- Lower first-year cost option
- Returned as a plain value and shown as the headline result. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.
- Overtime annual cost
- Returned as a money amount in US dollars. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.
- New hire first-year cost
- Returned as a money amount in US dollars. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.
- Annual difference
- Returned as a money amount in US dollars. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.
- Breakeven OT hours/week
- Returned as a decimal number. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.
FAQ
Does this account for onboarding costs disappearing after year one?
Right — a new hire looks more expensive in year one because of onboarding, but in year two onward the comparison usually tilts further toward hiring if the overtime need is ongoing.
What about burnout and error rates from sustained overtime?
Not quantified here, but sustained overtime above 10-15 hours/week is linked to rising error rates and turnover risk, both real costs beyond the wage premium.
Is overtime ever the clearly better choice?
Yes, for short-term or seasonal spikes in workload — hiring for a temporary need often costs more in severance or idle capacity once the spike ends.
Accuracy and 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.
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W-2 Employee vs 1099 Contractor Cost Calculator
Compare the fully-loaded cost of hiring an employee against paying a contractor the same work.
Cite this calculator
Writing about this topic? Grab a citation — every link helps keep these tools free.
RevenueLab. (2026). Hire New Employee vs Overtime Cost Calculator. Retrieved from https://www.revenuelab.fyi/toolbox/hire-new-employee-vs-overtime-cost
<p>Source: <a href="https://www.revenuelab.fyi/toolbox/hire-new-employee-vs-overtime-cost" target="_blank" rel="noopener">Hire New Employee vs Overtime Cost Calculator — RevenueLab</a> (2026).</p>
Source: [Hire New Employee vs Overtime Cost Calculator — RevenueLab](https://www.revenuelab.fyi/toolbox/hire-new-employee-vs-overtime-cost) (2026).