When does overtime cost more than hiring?
See exactly when paying overtime costs more than making a hire.
Enter your OT hours, rates, and a new hire’s total cost to get a clear break-even day and cumulative spend chart.
Overtime vs Hire Break‑Even
See at a glance when paying overtime costs more than hiring. Adjust the inputs below to reflect your situation. Hover or tap the i icons for guidance.
Advanced Inputs
Overtime vs. Hire Break‑Even FAQ
Weekly overtime cost = (OT hours × OT rate × employees) plus a soft‑cost uplift. We add an “intangible factor” (default 75%) to reflect burnout, errors and missed opportunities. Research shows roughly two‑thirds of sunk costs in turnover are intangible , so starting at 75 % produces a realistic estimate.
It includes base salary plus benefits, an agency fee if you’re using a recruiter, ramp‑up pay for the first few weeks (salary prorated to ramp days), and any direct training cost. Together these form the total cost to bring a new person fully productive.
This is the number of days/weeks it takes for accumulated overtime costs to equal the total hire cost. If your break‑even is short, it’s cheaper to hire; if it’s far off, you might stick with overtime or contract.
It multiplies your weekly overtime cost to capture harder‑to‑see impacts like burnout, increased error rates, lost knowledge and morale issues. Studies estimate that intangibles make up about two‑thirds of turnover costs , so the default is 75 %. Lower it if your team is coping well, or raise it for mission‑critical roles.
It scales the intangible factor up or down. For example, if overtime is causing people to quit, set this above 1 to model the extra risk.
Agencies typically charge 10-30 % of salary for permanent placements and 20–75 % on the hourly pay for temporary roles .
Higher mark‑ups raise the hire cost and push the break‑even further out; lower mark‑ups make hiring more attractive sooner. Enter 0 % if you’d hire directly without an agency.
Not automatically. Enter your actual overtime rate; if your regular hourly pay is $20, and overtime is 1.5×, you’d put $30.
Yes. It assumes a standard 260 working days per year and doesn’t model employer taxes, overhead or variable overtime patterns. It’s an estimator—tweak the inputs to fit your reality.
Annualize it: hourly rate × 40 × 52. If schedules vary, use your typical weekly hours.
