Overtime vs Hiring Calculator
Whether a standing need for extra hours is cheaper met with overtime or with an additional employee — the weekly cost of each, the one-off cost of hiring, and the number of weeks at which the hire pays back.
Overtime costs the base rate times a premium — usually 1.
How the overtime vs hiring calculator works
Overtime costs the base rate times a premium — usually 1.5 — with no recruiting cost, so it wins for short needs. A new hire costs the base rate plus on-costs for the hours, plus a one-off recruiting and training cost, and is only there for the hours you need if the role can be part-time. Divide the one-off cost by the weekly saving for the break-even in weeks; beyond it, hiring is cheaper — and overtime also has hidden costs in fatigue and turnover.
Formula: overtime per week = hours × rate × premium; hire per week = hours × rate × (1 + on-costs); break-even weeks = hiring cost ÷ (overtime − hire)
Worked examples
| Inputs | Cheaper option over the period | Note |
|---|---|---|
| 30 hours a week at 32, 1.5× overtime, 40 weeks | Hire | hire — pays back in 25 weeks |
| Same need for 12 weeks | Overtime | overtime |
| High on-costs make overtime cheaper per week | Overtime | overtime — never pays back |
FAQFrequently asked questions
What premium should I use?
Whatever your award, agreement or contract sets — 1.5 for the first hours is common, 2 for Sundays, holidays or beyond a threshold. Salaried staff on no overtime have a premium of 1 in cash but a real cost in fatigue.
What if the need is only part of a full-time job?
Then a hire may bring hours you cannot use; enter the hours you would actually pay for (a part-time role) or the full-time hours if that is the only option. The comparison is only fair on paid hours.
What are the hidden costs of overtime?
Fatigue and error rates rise after about 50 hours a week, productivity per hour falls, and sustained overtime drives turnover — whose replacement cost is often a third of salary. A few weeks is fine; months are not.
What about a contractor or agency?
A third option: no recruiting cost, higher hourly rate, easy to stop. Run it as a hire with zero one-off cost and the agency rate as the base with no on-costs.
Where these figures come from
- CIPD — Employee turnover and retention factsheet — the turnover and stability index definitions used here
- Acas — the UK workplace advice service
Last checked: September 2026. These are standard management definitions; where practice varies, the page says which convention it uses.