Overtime cost vs. hiring

Overtime vs. hiring break-even calculator

Q: How is monthly overtime cost calculated?

The tool multiplies employees on OT × avg OT hrs/week (per person) × (52÷12) × hourly base rate × OT multiplier. That dollar total feeds break-even math and the cumulative chart. It does not include the optional fatigue adjustment.

Q: What does the fatigue factor toggle do?

When Include fatigue factor is on, productivity loss follows avg OT hrs/week per person: 10% when OT is above 10 and up to 20 hrs/week, 25% when above 20 (10 hrs/week or less applies none). That drives the Efficiency leak panel only. It does not change monthly OT dollars, break-even month, or the cumulative chart.

Q: How should I read the Verdict card?

The headline is Hire Now when break-even is month 8 or sooner; otherwise it reads Evaluate Risk (including when OT stays cheaper). Below that, Months until profitability shows the break-even month when it falls within 12 months. When hiring wins, you also see Projected annual savings (pre-tax) and Year 1 net ROI (savings − onboarding).

Q: Can I export a report?

Download strategy report (PDF) builds a staffing summary from your inputs, Verdict, key numbers, charts, and risk notes on your device. Other calculations run locally in the browser.

This calculator compares monthly overtime spend to the fully burdened cost of one new hire, then shows the break-even month when cumulative hiring catches up after onboarding. Enter OT headcount, hours, rates, salary, burden, and onboarding; read the Verdict, charts, and optional fatigue leak panel. It is a staffing model, not HR or tax advice, and runs locally in your browser.

By Jeff Beem

Updated July 6, 2026

Overtime track

Employees on OT

Avg OT hrs/week (per person)

Hourly Base Rate

OT Multiplier

Default 1.5x

10% leak if OT > 10 hrs/wk [1], 25% if > 20 [2]

New hire track

Target Annual Salary

Fully burdened: $36/hr

Payroll Burden %

2026 employer taxes & benefits (default 25%)

Onboarding Cost

Equipment, recruiting, training (front-loaded)

Verdict

Hire Now

$65,400

Projected annual savings (pre-tax)

$60,400

Year 1 net ROI (savings − onboarding)

Cash impact after recouping the upfront investment.

Actual impact depends on your tax situation and how savings are applied.

Months until profitability: Month 1

Key numbers

Monthly OT cost

$11,700

New hire monthly (burdened)

$6,250

Fatigue factor

10%

Effective capacity

90%

Consultant's insights

Burnout risk: Med (12 hrs OT/week)
Urgent hire: Overtime spend is inefficient vs. a new headcount at these inputs.
Training investment: $5,000 to reach full speed.
Hourly delta: New hire is $8.9 cheaper per hour than OT.

Efficiency leak

Fatigue factor: 10%

Paying for 60 hrs/week but ~54 hrs/week effective output.

Effective capacity90%

Hidden OT cost: $1,170/mo

Cumulative cost (12 months)

New hire line starts at onboarding cost on the vertical axis, not zero.

Effective hourly rate

OT $45/hr vs. burdened hire $36/hr.

2026 model: US/Canada-style burden averages and productivity-decay assumptions.

Worked example at default inputs

With 5 employees at 12 OT hrs/week each, $30 base, 1.5× multiplier, $60,000 salary, 25% burden, and $5,000 onboarding, the results column and charts look like this.

Key numbers, Verdict, and charts

Monthly OT cost about $11,700; New hire monthly (burdened) about $6,250. Break-even is month 1, so the headline reads Hire Now with Projected annual savings (pre-tax) about $65,400 and Year 1 net ROI about $60,400 after onboarding. On this page, Cumulative cost (12 months) plots OT from zero and the hire line from onboarding; Effective hourly rate compares OT ($45/hr) to burdened hire (~$36/hr). Download strategy report (PDF) exports the same summary.

Fatigue, insights, and turnover panels

With fatigue on at 12 OT hrs/week per person, Key numbers shows a 10% fatigue factor, 90% effective capacity, and Efficiency leak reports about $1,170/mo hidden OT cost. Consultant's insights lists Med burnout risk, an urgent-hire note (break-even in months 1–2), and that the new hire is about $8.90/hr cheaper than OT. At 12 hrs/week there is no High turnover risk panel (that appears above 15 OT hrs/week per person).

Overtime vs. hiring break-even calculator

Compare monthly overtime spend to one burdened new hire and see when cumulative hiring overtakes OT after onboarding.

What this calculator returns

This page helps you compare what you are spending on overtime each month with the fully burdened cost of adding one full-time employee, then shows the month when hiring catches up after onboarding so you can decide which path fits your team.

Inputs:

OT headcount, hours per person, base rate, multiplier; salary, burden %, onboarding; optional fatigue toggle.
Outputs:

Verdict, break-even timing, monthly totals, savings estimates, optional efficiency leak, insight panels, charts, PDF.
Limits:

Single hire vs current OT pattern; US/Canada-style burden defaults; fatigue affects the leak panel only.

How the math works

Monthly OT = employees on OT × avg OT hrs/week per person × (52÷12) × base rate × OT multiplier.

Monthly new hire = annual salary × (1 + burden%) ÷ 12.

When monthly OT exceeds monthly new hire cost, break-even month = onboarding ÷ (monthly OT − monthly new hire), rounded up. Cumulative OT at month m is m × monthly OT; cumulative hire is onboarding plus m × monthly new hire (month 0 starts at onboarding on the chart).

When the fatigue toggle is on, hidden OT cost = monthly OT × fatigue % (10% or 25% from avg OT hrs/week per person). Projected annual savings = (monthly OT − monthly new hire) × 12 when that gap is positive; Year 1 net ROI subtracts onboarding from projected annual savings.

Controls on this page

Panel names match the live widget.

01 Overtime track / 02 New hire track:

All cost inputs; fatigue toggle lives under overtime.
Verdict / Key numbers:

Headline recommendation, monthly OT vs hire, fatigue % and effective capacity when applicable.
Consultant's insights:

Burnout level, urgent-hire note when break-even is months 1–2, training cost, hourly delta.
Efficiency leak / High turnover risk:

Hidden OT cost when fatigue applies; replacement-cost note when OT exceeds 15 hrs/week per person.
Charts / PDF:

Cumulative cost (12 months), Effective hourly rate, Download strategy report (PDF).

Overtime vs. Hiring Break-Even FAQ

How is monthly overtime cost calculated?

The tool multiplies employees on OT × avg OT hrs/week (per person) × (52÷12) × hourly base rate × OT multiplier. That dollar total feeds break-even math and the cumulative chart. It does not include the optional fatigue adjustment.

What does fully burdened new hire monthly mean?

Target annual salary plus employer payroll burden (taxes, benefits, overhead), divided by 12. The helper under Target Annual Salary shows the burdened hourly rate using 2,080 hours per year.

How is break-even month calculated?

When monthly OT exceeds burdened new-hire monthly cost, break-even month = onboarding ÷ (monthly OT − new hire monthly), rounded up. If monthly OT is already lower than a new hire, break-even is undefined and the Verdict subtext reads that hiring does not pay off at these inputs. If break-even falls after month 12, the subtext notes OT is cheaper in year one.

What does the fatigue factor toggle do?

When Include fatigue factor is on, productivity loss follows avg OT hrs/week per person: 10% when OT is above 10 and up to 20 hrs/week, 25% when above 20 (10 hrs/week or less applies none). That drives the Efficiency leak panel only. It does not change monthly OT dollars, break-even month, or the cumulative chart.

How should I read the Verdict card?

The headline is Hire Now when break-even is month 8 or sooner; otherwise it reads Evaluate Risk (including when OT stays cheaper). Below that, Months until profitability shows the break-even month when it falls within 12 months. When hiring wins, you also see Projected annual savings (pre-tax) and Year 1 net ROI (savings − onboarding).

Can I export a report?

Download strategy report (PDF) builds a staffing summary from your inputs, Verdict, key numbers, charts, and risk notes on your device. Other calculations run locally in the browser.

Sources & citations

References used for the calculation method and definitions. Links open in a new tab when available.

[1]

The Productivity of Working Hours (Stanford University, John Pencavel, 2014)

Output per hour falls after roughly 48–50 working hours per week; supports moderate overtime productivity loss assumptions.

[2]

Overtime and Extended Work Shifts (NIOSH/CDC, Publication No. 2004-143)

Extended shifts, fatigue, and injury risk; cited for higher productivity loss at heavy weekly overtime.

Financial Estimation Note

General Projections: Results are mathematical estimates based on the rates and formulas currently loaded for this tool, including year-specific tax data where noted. They are intended for high-level planning only.

No Advice Provided: This site does not provide financial, tax, or legal advice. Using this tool does not create a client-advisor relationship with CalcRegistry.

Confirm Numbers: Financial laws change frequently. Please verify all results with a qualified professional (CPA, Financial Planner, or Lawyer) before making significant financial decisions.