The biggest line item for most startups is payroll. A static "current burn / cash" calculation fails to account for the compounding cost of new hires. A "healthy" 18-month runway can shrink to 9 months if you plan to double your engineering team next quarter. This calculator solves that by letting you model "step function" increases in burn rate.
2. The "Fully Loaded" Employee Cost
Beyond the Salary
When planning, never use just the gross salary. Cost to company (CTC) includes significantly more than what's on the offer letter:
Taxes and Benefits: +15-25% (Health insurance, payroll taxes, 401k matching)
Equipment and Software: +$500-$1000/mo (MacBooks, seats, Slack/Jira licenses)
Recruiting Fees: 15-20% of first-year salary (one-time cost often forgotten)
Office Overhead: Per-headcount rent and utility allocation.
3. Default Alive vs Default Dead
Paul Graham\'s famous concept asks: If expenses remain constant and revenue growth continues at the current rate, do you reach profitability before running out of money? With a hiring plan, expenses do not remain constant. You must verify if the revenue generated by new hires (Sales, Marketing) outpaces their cost. Use the optional "Revenue" field to model this impact.
4. How to Calculate Runway Correctly
The formula is simple but the variables are dynamic:
Runway (Months) = Current Cash / Average Monthly Burn Rate
However, using "Average" is dangerous if burn is increasing. A better method, used by this tool, is to simulate month-by-month deduction until cash hits zero. This reveals the exact drop-dead date.
5. Fundraising Timing Strategy
Investors smell desperation. You should effectively have a signed term sheet before you dip below 6 months of cash. Given that rounds take 3-6 months to close, you need to start the process when you have 9-12 months of runway left.
6. Common Runway Mistakes
Optimistic Revenue: Banking on sales that haven't closed to pay salaries.
Ignoring Seasonality: Some businesses have lumpy revenue but constant burn.
Forgeting Severance: If things go wrong, winding down costs money. You can't run the tank to exactly $0.
Conclusion
Use this calculator to stress-test your hiring roadmap. If your runway dips below 9 months at any point, delay hires or accelerate fundraising.
Frequently Asked Questions
How much runway should I have?
Standard advice is 18-24 months after a fresh round of funding. You should start raising your next round with at least 9 months of runway remaining.
Should I include equity in compensation costs?
Equity grants (ESOPs) do not impact cash runway directly, but they dilute ownership. This calculator focuses purely on cash burn.
What is a good burn multiple?
Burn Multiple = Net Burn / Net New ARR. Efficiency targets: <1.0 is Amazing, 1.0-1.5 is Great, 1.5-2.0 is Good, >3.0 is Suspect.
What happens if my runway is less than 6 months?
This is "Default Dead" territory. You must immediately cut non-essential costs, freeze hiring, and go into emergency fundraising mode or consider M&A options.
How do I calculate "Fully Loaded" salary?
Multiply the base salary by 1.25 to 1.30. This buffer accounts for employer payroll taxes, health benefits, equipment, and other per-employee overheads.
Does this calculator account for revenue growth?
You can manually adjust the "Monthly Revenue" field to see different scenarios, but this simplified model assumes constant revenue to be conservative. For precise growth modeling, use a dedicated financial model excel sheet.
Summary
The Startup Runway with Hiring Plan Calculator provides a dynamic view of your company's financial timeline.
Unlike static calculators, it integrates your roadmap to show how personnel decisions today impact your survival date tomorrow.
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Calculate startup runway with a dynamic hiring plan to see how headcount growth impacts cash flow.
How to use Startup Runway Calculator with Hiring Plan
Step-by-step guide to using the Startup Runway Calculator with Hiring Plan:
Enter your values. Input the required values in the calculator form
Calculate. The calculator will automatically compute and display your results
Review results. Review the calculated results and any additional information provided
Frequently asked questions
How do I use the Startup Runway Calculator with Hiring Plan?
Simply enter your values in the input fields and the calculator will automatically compute the results. The Startup Runway Calculator with Hiring Plan is designed to be user-friendly and provide instant calculations.
Is the Startup Runway Calculator with Hiring Plan free to use?
Yes, the Startup Runway Calculator with Hiring Plan is completely free to use. No registration or payment is required.
Can I use this calculator on mobile devices?
Yes, the Startup Runway Calculator with Hiring Plan is fully responsive and works perfectly on mobile phones, tablets, and desktop computers.
Are the results from Startup Runway Calculator with Hiring Plan accurate?
Yes, our calculators use standard formulas and are regularly tested for accuracy. However, results should be used for informational purposes and not as a substitute for professional advice.