What a new hire actually costs

Ask what a role costs and most people answer with the salary. Ask Finance the same question and you get a different, larger number. The gap between the two is why so many headcount plans fit the budget on paper and break it in practice: the plan was priced in offer-letter salaries while the company pays fully loaded costs.

What sits on top of the salary

Fully loaded cost is the total yearly amount the company pays for a seat to exist. On top of cash compensation, it typically includes employer payroll taxes and social contributions, benefits and insurance, retirement contributions, equipment and software, and often an allocation for the space and shared services the person uses. Depending on country and benefits policy, the loading commonly lands between 1.25 and 1.4 times base salary, and it can go higher for senior roles with bonus and equity or for countries with high employer contributions.

The exact multiplier matters less than using one deliberately. A plan priced in base salaries is not a conservative plan; it is a plan that is systematically wrong in one direction. If you have real numbers from Finance, use them. If you do not, use a labeled estimate and make it visible, so a reviewer can challenge the assumption instead of discovering it after approval.

Timing changes the number more than negotiation does

The second most common pricing mistake is charging every hire for a full year. A role with a $260,000 loaded cost that starts in July contributes $130,000 to this year's plan. Move the start to October and it contributes $65,000. Across a ten-person hiring wave, sequencing the start dates is often worth more to the current-year budget than any amount of rate negotiation, and it is entirely under the planner's control.

This is why a hiring plan needs start months on every row, not a headcount total. The same end-of-year organization can differ by seven figures in current-year cost depending on when people actually start, and a plan that cannot show that difference cannot defend it.

Allocation and employment type are part of the price

Not every seat is a full-time employee at 100 percent. A contractor covering a six-month gap, a designer split across two teams, or a vendor line that behaves like half a role all price differently. The pattern that keeps a plan honest is the same in every case: annual loaded rate, multiplied by allocation, counted only for active months. A $215,000 designer at 50 percent from April to September is a $53,750 line, not a $215,000 one.

A worked example

Take a three-hire growth ask: an engineering manager starting in March at $270,000 loaded, two engineers starting in June at $260,000 each. Priced naively at annual rates, the ask reads as $790,000. Priced by active months, the current-year cost is $225,000 for the manager and $151,667 for each engineer, about $528,000 in total. Both numbers are true; they answer different questions. A reviewer needs both: what the ask does to the run rate, and what it does to this year's budget.

Make the assumption inspectable

Whatever tool you plan in, the discipline is the same. Every seat carries a loaded rate with a visible source: a company rate card, a benchmark, or an explicit override. Every seat carries a start month and an allocation. Totals are computed from those facts rather than maintained by hand. Our workforce cost methodology documents the exact formulas we use, and the free headcount planning template applies them in a plain CSV if you want to start in a spreadsheet.

In Arrange, this arithmetic is the default behavior. Roles land on the canvas priced from a labeled benchmark card, start months and allocations are fields on the seat, and the plan's monthly and annual totals re-roll as the structure changes. The headcount planning guide covers the full workflow from priced plan to approved funding request.

Start a plan and price your next three hires with loaded costs and real start dates. It runs in your browser, free, no card.