A $70k hire does not cost $70k.

The salary is the headline, not the bill. Take a $70,000 builder. On top of the gross pay you add employer KiwiSaver at 3.5%, which is $2,450, and the ACC work levy for a builder at $1.53 per $100, which is $1,071. That alone is $73,521 before anything else, and none of it is optional.

Then come the choices that push it higher. A work ute, once you count fuel, insurance, servicing, and the money it loses in value, is commonly $8,000 to $12,000 a year. Tools, PPE, and any tickets or training in the first year can be a few thousand more. Add a phone, a share of your admin time, and the odd course, and a $70,000 salary is realistically an $85,000 to $90,000 commitment in year one. The calculator above lets you build your own version of that number instead of guessing.

Here is the part that quietly changes the maths. You pay for a full year, but you do not get a full year of work.

A 40-hour week across 52 weeks is 2,080 paid hours. Out of that comes four weeks of annual leave, that is 20 days, plus the eleven public holidays, plus the sick days a worker is entitled to take. Once you strip those out, real productive time lands nearer 1,750 hours, not 2,080. So a builder on $70,000 whose true cost is around $73,500 is not costing you $35 a productive hour. Divide by the hours you actually get and it is closer to $42. That gap, roughly seven dollars an hour, is invisible on the payslip and decisive when you price a job. Charge out at a rate built on 2,080 hours and you are underwater before you start.

Annual leave and public holidays are not a separate line you pay on top. They are paid time inside the salary, which is exactly why they are easy to forget. The employee earns the same $70,000 whether they are on site or on the beach for their four weeks off.

What matters is not adding leave as an extra cost, it is understanding that it shrinks the productive hours the salary buys. That is the calculation the tool does for you: it keeps the salary whole, then shows you the working days that are paid but not worked, so the per-hour figure tells the truth. Sick leave sits on top of this as a genuine variable. Some years a worker takes none, some years they take the lot, so treat it as a buffer rather than a fixed cost.

The first hire is the scariest one because it is a fixed cost that turns up every week whether the work is there or not. The simple test is whether they free up or add enough billable work to more than cover their fully loaded cost.

Run the numbers with real figures. If a hire fully loaded costs you around $85,000 a year, that is roughly $1,650 a week you have to cover before they earn you a cent. At a $70 charge-out rate over, say, 30 genuinely billable hours a week, they bring in about $2,100. That clears the cost with something left for overhead and profit, which is the whole point. The rough rule of thumb that they should bill about double what they cost is not a law, but it is a decent sanity check. If you cannot see how they get to double their loaded cost in billable work, the hire is early. If you are turning work away every week, it is overdue.

Two employer costs are locked in by law. KiwiSaver: from 1 April 2026 the compulsory minimum employer contribution is 3.5% of gross pay, up from 3%, and it rises again to 4% from 1 April 2028. You pay it for every eligible employee who is contributing. ACC: your work levy depends on your industry classification, which is why the trade dropdown changes the total.

Two things this tool deliberately does not compute, stated plainly so you are not caught out. ESCT is a tax on the KiwiSaver contributions you make, usually a few hundred dollars a year depending on the employee's pay band. It is a real extra employer cost we have left out to keep the tool simple, so add a small buffer for it. PAYE is income tax, but it comes out of the employee's pay, not yours, so it is not an employer cost at all. Rates and thresholds change, so check the current figures at the ACC levy calculator and with your accountant before you commit to a hire.

Apprentice and training subsidies can offset some of this, but the schemes change often and are not always open. We have not baked any in because an out-of-date subsidy figure is worse than none. If you are hiring an apprentice, check what is currently available on the official Tertiary Education Commission and Inland Revenue pages before you rely on it.