How do I budget for hiring and payroll growth?

Budgeting for hires and payroll

Payroll is often the largest expense. Budget based on hiring priorities, expected productivity, and cash availability.

Steps to build a hiring budget:

• Define roles and the impact each hire will have on revenue or operations.
• Estimate total cost of each hire: salary, benefits, taxes, equipment, and onboarding.
• Schedule hires against milestones and cash flow availability.

Budgeting tips

1. Prioritize revenue-generating and critical ops roles first.
2. Use conservative ramp assumptions—new hires often take months to reach full productivity.
3. Include a buffer for unexpected hires or salary adjustments (typically 10–15%).

Monitoring and control

Track hiring against budget monthly and measure ROI per hire when possible (revenue per salesperson, time saved per operations hire). Adjust hiring pace if runway shortens.

Alternative approaches

Use contractors or fractional roles for specialized needs until you can justify full-time hires. This preserves flexibility while validating long-term needs.