You have a list of people you want to hire and a budget that has an opinion about it. This workbook is where those two things meet, one month at a time.
Why a flat 1.3x multiplier is wrong for most of your hires
The usual rule of thumb for a hiring plan takes the salary, multiplies it by a flat 1.25x or 1.3x, and calls that the loaded cost. It is quick to do in your head, and quick is the only thing it has going for it. One number cannot be right for everybody, for two reasons.
Three of the five employer taxes stop at a wage base. Social Security stops. Federal unemployment stops after the first $7,000. State unemployment stops wherever your state sets it, at a rate assigned to your business. Above those ceilings you pay nothing more, so the tax share of salary falls as pay rises.
And flat-dollar costs do not care what you pay. Your share of a health premium is the same money for a junior coordinator as for a principal engineer. So is the payroll and HR admin fee. Those dollars are a big slice of a small salary and a rounding error on a large one — and that, more than the tax caps, is what pulls the multiplier around.
This workbook computes every line separately, against the real caps, and hands you the multiplier as an answer. On the worked example it ranges from 1.18x to 1.34x across the employees, and 1.03x for a contractor. Pick one rate in the middle and you have over-budgeted every senior hire and under-budgeted every junior one.
When the money actually leaves
A hire starting on the 19th costs you thirteen days that month, not a whole one. The Monthly Forecast phases eighteen months of cash from each real start date, prorated by days, and lands the one-time setup and recruiting spend in the start month only — never smeared across the year.
Budget vs Plan then puts that against your own budget line and gives you a straight answer: the variance every month, the cumulative headroom that decides whether the year works, and the first month you go over, by how much.
The hires you did not plan for
Your plan is net-new growth. It quietly assumes nobody leaves. Put your current headcount and honest attrition against each department and the workbook prices the replacing you will have to do — the recruiting spend to refill each seat, plus the output lost while it sits empty. On the worked example the plan clears its budget by $89,659, and the backfill reserve is $91,283.
How many can we actually afford?
Set a priority cutoff and push the start dates back, and every hire is re-costed against three versions of the plan — base, lean and stretch — each with the hires it keeps, its Year-1 cost, and the months of runway it leaves you. That turns an argument about whether the plan is affordable into a choice between specific numbers.
What else it works out
- Months to payback. Give a role its ramp weeks and the value you expect it to carry, and the workbook solves for the month cumulative contribution overtakes cumulative cost.
- The break-even contractor rate. The hourly rate at which a contractor would cost exactly the same as this employee. A cost comparison only — worker classification is a legal question with its own rules.
- Your own cost per hire, from your own recruiting and setup spend, rather than a benchmark from someone else’s business.
Working outside the U.S.
Switch Employer mode to a single blended employer rate and the itemized U.S. components turn off — the forecast, budget, scenario and payback engines all keep working. Every department, role, fiscal-year start and rate is an editable input, so nothing here assumes your business is shaped like the example.
Try it free first
There is a free single-tab version — the Quarterly Headcount Planner — that sketches one quarter of hiring using the familiar 1.3x rule of thumb, with a one-page guide on exactly where that rule of thumb goes wrong. No email, no signup. If it tells you what you needed, keep it. The full workbook is for when the sketch has to become a budget somebody signs.
Own it, don’t rent it
Headcount planning software is billed per employee, per month, often with an annual minimum, and your plan lives on someone else’s servers. A blank spreadsheet is free and costs you a week of evenings. This sits in between: one payment, nine tabs already computing, and a file you keep. Nothing is locked or password-protected — every formula is yours to read and to change, and the spare rows are pre-formulated so adding a hire cannot break it.
The fine print worth reading twice
The company, roles, salaries and hires in the file are fictional and illustrative. The tax rates and wage bases ship as the 2026 U.S. federal figures, provided as an editable starting point and not as advice — your state unemployment rate and wage base and your workers’ compensation rate are assigned to your business, and the federal figures change each year. Verify them at ssa.gov (opens in new tab) and irs.gov (opens in new tab), and against your own rate notices, before you commit a budget. This is a planning tool: it does not file anything, does not connect to your payroll system, and does not track your actual spend for you. It is not payroll software, and not tax, HR, employment, or legal advice.
