Payroll And HR Services Break-Even: $1095K Monthly Revenue

Fixed costs $69.6K/mo Base overhead

Contribution margin 75% After variable costs

Break-even revenue $92.8K/mo Needed monthly sales

Break-even timing Month 20 Model break point

Break-even calculator

Use this calculator to test how monthly revenue, variable expenses, and fixed costs stack up against break-even for payroll and HR services.

Lean Base Full

Monthly revenue Revenue is the cash in before direct costs and overhead. $ Low sales High sales Variable expenses Direct costs like commissions, onboarding, cloud, and payment fees rise with sales. $ Lean costs Heavy costs

Money available to cover fixed costs $75,000 $100,000 revenue - $25,000 variable expenses

Margin ratio

75%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly overhead contribution margin must cover. $ Light overhead Heavy overhead

Break-even chart Revenue Total costs

Which payroll and HR service expenses stay fixed, and which move with sales?

Cost classification

Break-even is only reliable if fixed overhead is separated from revenue-linked delivery work. Here’s the quick math: fixed overhead is $9.8K/month, Year 1 salaries are about $59.8K/month, and variable delivery items total 25% of revenue.

Expense	Cost	Break-Even Treatment	Common Mistake
Office rent, utilities, professional services, compliance, software, benefits administration, security audits, and supplies	Fixed	Model as $9.8K per month from Month 1 through Month 60.	Treating every software line as usage-based.
Year 1 core salaries	Fixed	Model as about $59.8K per month for the CEO, product lead, developer, HR lead, sales manager, and half-time marketing role.	Excluding payroll from break-even overhead.
Cloud hosting and infrastructure	Variable	Apply 7% of revenue in the first year, falling to 3% by the fifth year.	Locking hosting into one flat monthly amount.
Third-party API and payment processing fees	Variable	Apply 5% of revenue in the first year, falling to 1% by the fifth year.	Missing per-client and payment-volume fees.
Sales commissions	Variable	Apply 8% of revenue in the first year, falling to 4% by the fifth year.	Counting commissions as fixed sales payroll.
Customer success and onboarding work	Variable	Apply 5% of revenue in the first year, falling to 1% by the fifth year.	Treating all support labor as fixed overhead.
Account executive and customer support hires after launch	Semi-fixed	Add capacity in steps: both roles start in Month 13 and rise as the client base grows.	Spreading future hires evenly across all months.
Compliance review and onboarding workload	Semi-variable	Keep the base compliance budget fixed, but allow extra review and setup work to rise with client volume.	Ignoring usage spikes when larger clients onboard.

How much monthly revenue does payroll and HR services need to break even as it moves from lean to base to full?

Scenario table

As staffing, marketing, software, and client support scale, fixed costs rise, so break-even revenue moves up even when the margin mix improves. Lean is the easiest launch case; full needs the biggest recurring book.

Planning assumptions only; actual break-even will move with client mix, pricing, and onboarding load.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean launch plan	$1,095K	$274K	$821K	75%	$0	Lowest overhead, so launch risk is easier to control.
Base recurring plan	$1,437K	$301K	$1,136K	79%	$0	Best middle case for repeatable sales and steadier break-even coverage.
Full-scale service book	$2,046K	$348K	$1,698K	83%	$0	Highest break-even target, so it only works with a larger recurring book.

What pushes this payroll and HR services plan past break-even?

Stress test

The plan is fragile to slower sales, higher support work, and fixed-cost creep. A 10% revenue miss or a 10% fixed-cost hike can erase the Year 1 cushion, and margin pressure from onboarding or compliance labor makes the gap wider.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change from Year 1 assumptions.	$1.095M	$0 gap	No cushion at all.
Revenue shortfall	Revenue is 10% below plan at about $985K.	$1.095M	$82K gap	A small sales miss creates an $82K gap.
Fixed-cost pressure	Fixed costs rise 10% to about $903K.	$1.204M	$82K gap	A higher overhead base pushes break-even later.
Margin pressure	Variable expenses rise to 30% of revenue.	$1.173M	$55K gap	More onboarding, software, or compliance work cuts the margin cushion.
Combined pressure	Revenue falls 10%, variable expenses rise to 30%, and fixed costs rise 10%.	$1.289M	$213K gap	Slow sales and higher costs together create the largest miss.

Can this payroll and HR business reach break-even before you lock in heavier hiring and spend?

Founder checklist

Yes, but only if you can show near-signed clients for about 90 accounts at a blended $1,220 a month. Keep Year 1 variable costs near 25%, hold the fixed load near $69.6K a month, and wait on new hiring until demand repeats.

1Pipeline Proof$109.8K/mo

Verify signed or near-signed clients can reach about 90 accounts so first-year revenue can cover the operating base.

2Margin Mix75% CM

Keep COGS and variable costs near 25% of revenue, because that leaves about 75% contribution to pay fixed costs.

3Fixed Load$69.6K/mo

Check that wages plus overhead stay near this monthly burn, or break-even gets pushed out fast.

4Service Capacity90 accounts

Make sure onboarding and customer success can handle about 90 client accounts before you add account executive or support headcount.

5Cash TroughMonth 19

Hold enough cash for the Month 19 low point of negative $190K, since breakeven arrives at Month 20.

6CAC Check$2.0K CAC

Test whether the $150K Year 1 marketing budget can buy enough customers at this acquisition cost before you scale spend.