You’re drowning in work. Exhausted. Turning down jobs you’d love to take. Working another Saturday because there’s no one else to do it. The thought keeps creeping in: I need to hire someone.
Then you look at your bank account and freeze. Can you actually afford this?
Here’s what most Fort Worth business owners do next: they calculate the salary, maybe add a little cushion for taxes, and think, Okay, I can swing that. A $50,000 employee costs $50,000, right?
Wrong.
That $50,000 employee will actually cost you somewhere between $62,500 and $70,000 when you account for everything. And we’re not talking about hidden fees or accounting tricks. We’re talking about real, mandatory costs that hit your bank account every single month, whether business is good or not.
We know you’re ready for help. You’re burned out. But before you post that job listing, let’s walk through the math that shocks people when they see it for the first time.
According to the SBA, the cost of an employee is typically 1.25 to 1.4 times the salary. That means if you pay someone $35,000, your actual costs will range from $43,750 to $49,000.
We’ve sat across the table from business owners who thought they were ready to hire, and when we ran these numbers together, their face went pale. They were about to make a decision that would’ve put them underwater in three months.
Here’s where it goes for a $50,000 salary:
Social Security: 6.2% of salary = $3,100
Medicare: 1.45% of salary = $725
Federal Unemployment Tax (FUTA): Usually small after credits, roughly $200-$300
Texas Unemployment Insurance (SUTA): New businesses commonly pay 2-3% early on = $1,000-$1,500
Total payroll tax hit: $5,000-$6,500
Your $50,000 salary just became $55,000-$56,500. And we haven’t even gotten to the part that makes people’s eyes widen. This is where the optimism starts to crack.
This is the line item that gets the biggest reaction when we show business owners the breakdown. The moment when hiring suddenly feels a lot less affordable.
Rates vary wildly by industry:
Office/admin roles: $0.25-$0.50 per $100 of payroll = roughly $250/year
Light service roles: $1-$2 per $100 = $500-$1,000/year
Construction or trades: $5-$20+ per $100 = $2,500-$10,000+/year
If you’re in HVAC, plumbing, electrical, or any hands-on trade, this number can be brutal. We’ve seen Fort Worth contractors get quoted $8,000+ per employee for workers’ comp alone. That’s the moment they realize hiring isn’t just about finding good people, it’s about whether the business can actually carry the cost.
Many business owners forget this entirely until their insurance broker sends the quote. Then the panic sets in.
Even if you’re not offering a gold-plated benefits package, the basics add up fast. And if you want to attract someone good, someone who’ll actually take the weight off your shoulders, you need to offer something competitive.
Health Insurance Contributions: Employers commonly cover 50-75% of premiums. Average employer cost per employee in Texas: $6,000-$9,000 per year.
Most small business owners don’t realize this before they start hiring. They’re thinking about the salary. Not the benefits that come with it.
Retirement Plan Contributions: If you offer a 401(k) match at 3-4% of salary, that’s another $1,500-$2,000 for a $50K employee.
Paid Time Off (The Hidden Payroll Cost): This is one of the most overlooked costs. If an employee gets 10 vacation days, 5 sick days, and 8 holidays, that’s 23 paid days off.
23 days ÷ 260 workdays = 9% of payroll you’re paying for zero production.
For a $50K salary, that’s $4,500 of paid time where no work gets done. You’re still doing the work. You’re still exhausted. But now you’re paying someone who isn’t there.
A new hire typically needs:
Laptop: $1,200-$2,000
Software licenses: $50-$200/month
Desk, equipment, phone, tools, etc.
Annualized, many businesses spend $2,000-$4,000 per employee on this stuff. Even remote workers usually require several tools and subscriptions.
Payroll software, HR platforms, time tracking systems, compliance filings. Per employee, you’re looking at $500-$1,000 annually.
It doesn’t sound big until you multiply it across multiple hires. Or until you’re three months in and wondering why there’s never enough cash.
Now that you know where every dollar goes, let’s talk about the question that’s probably making your stomach turn: Can I actually afford this?
Here’s the benchmark most healthy businesses follow: payroll should be 15-30% of revenue.
According to NetSuite, production-focused industries like construction and trades should aim for payroll between 15% and 30% of revenue. Anything above 30% means your labor costs are eating into your earnings.
Let’s break this down with real numbers.
If you’re bringing in $300,000 in annual revenue and you want to keep payroll at a healthy 25%, that gives you $75,000 for total payroll costs.
Remember, we’re not talking salary here, we’re talking actual cost, which includes taxes, insurance, benefits, everything.
Using the 1.4x multiplier, that $75,000 in payroll budget translates to roughly $53,500 in salary.
That’s one solid hire. Maybe two part-timers. But not three full-time employees.
Most Fort Worth business owners making $300K think they can afford two or three people. The math says otherwise. And that realization stings when you’re desperate for help.
Here’s where it gets tricky: if your payroll percentage creeps above 30%, your margins disappear fast.
A business spending 35% on payroll is working harder to make less. You’re busy, your team is busy, but the profit isn’t there. That’s the danger zone where you’re one slow month away from missing payroll or dipping into savings just to keep the lights on. The stress doesn’t go away, it just changes shape.
The businesses that stay healthy don’t just track revenue, they track payroll as a percentage of revenue every single month. When that number starts climbing, they know something needs to adjust: pricing, efficiency, or headcount. It’s not emotional. It’s math. And the math has to work before you hire.
According to financial experts, most businesses should keep enough money in the bank to pay about three months’ worth of salaries.
Before you even think about hiring, assess your cash flow honestly. If your business experiences fluctuating income, and most do, consider your slowest months and how a new employee would impact cash flow during that time. Not during your best month. During your worst one.
Missing a payroll deadline isn’t just bad for morale. It damages trust, impacts retention, and can result in compliance issues or penalties. But more than that, it’s terrifying. You don’t want to be the business owner who can’t make payroll. Trust us.
You need a cushion. Not just for payroll, but for employer payroll taxes, benefits, and all the associated costs we just walked through. Because the reality is this: hiring doesn’t relieve stress if the numbers don’t work. It multiplies it.
We know you’re exhausted. We know you’re ready for help. But hiring is one of the most important growth decisions a small business owner makes, and it only works if the numbers support it first.
At Adam Traywick, CPA, we work with Fort Worth small businesses, trades and professionals to help them make confident financial decisions as they grow. We regularly help clients evaluate hiring decisions by looking at payroll costs, profit margins, and cash flow together, so you can hire from a place of confidence, not desperation.
If you’re considering hiring this year and want to understand how the numbers would work for your business, book a call with us. Let’s make sure you’re ready, so when you do hire, it’s a decision that grows your business instead of sinking it.
Until next time!
