Why Labor Deserves Its Own Burn Metric

Payroll is usually the first line item investors ask about, because it is the largest and least flexible cost a company carries. This labor cost burn rate calculator separates labor from the rest of your burn so you can see exactly how much of your cash consumption is tied to headcount — and how that affects runway.

Reading Your Labor Share

Labor share of burn is computed as monthly payroll divided by total monthly expenses. Above 80%, almost every dollar you spend is a person, leaving little room for growth investment. Below 50%, other costs dominate and labor cuts alone will not fix the burn profile.

The Runway Math

Runway = cash balance ÷ net burn. Every payroll decision moves this number: adding a $10,000/month hire shortens runway by roughly 1 month per $10,000 of net burn. Use the calculator to model a hire, a raise, or a round of layoffs before you commit.