Hiring someone isn’t just about writing a paycheck and adding that cost to your services. Every time you add someone to payroll, you’re investing in so much more than just their hourly wage or salary.

It’s easy to think, “I pay them $30 an hour,” and not think about the rest of what it costs to hire them. But behind the scenes? You’re also paying taxes, benefits, training, downtime, and emotional energy to keep that role filled and functioning.

And if you’re not regularly reviewing who’s on your payroll plus who you need to hire, you will burn through cash reserves and continue to underprice your services.

Monthly Payroll Check-Ins Matter 🧾

Whether you have one employee or a full team, review your payroll list every single month. Ask yourself:

• Do I still need this role filled?
• Is this the right person for the role?
• Are they spending more time on the tasks than needed?
• Do I need to adjust pricing to cover the true cost of this hire?

The cost of labor impacts your bottom line and your pricing strategy more than almost anything else in your business. And yet? Most owners never look at it until they’re already in the red.

What Labor Really Costs You 🧠

Here’s what’s actually showing up on your books (even if it’s not obvious):

💼 Taxes – Social Security, Medicare, Unemployment insurance, State/local taxes

🩺 Benefits – Health insurance, Worker’s Compensation, Liability Insurance, Auto Insurance, Retirement matches, Paid holidays, Stipends

They keep your team happy, but they must be factored into your pricing if you want to stay cash flow positive.

📚 Training – Onboarding takes time, Coaching + corrections = time away from income, Upskilling = better team, but at a real cost

Every time you hire, you lose productivity during the training curve. It’s normal, but if you don’t plan for it, it can wreck your timelines and margins.

🛑 Downtime – Sick time, Vacations, Emergencies, Slow performance weeks, or Seasonal Work

You still pay for them, but your business isn’t always moving forward. Without reserves and margins built into your budget, this can be a slow bleed.

Your People Are Your Biggest Expense (And Biggest Asset) 💡

Hiring is necessary, amazing, and expensive.

It only works for you if you know the total cost of labor and plan for it. That means:

• Forecasting labor costs before you extend an employment offer
• Building your STOP Method™ accounts to fund the expense (especially OPERATIONS + SAVINGS)
• Raising your prices with intention, not panic and laying people off during slow times
• Evaluating your team monthly to make sure the ROI is there

 Final Thoughts from Your Favorite Bookkeeper 🧡

The people on your payroll are helping you build your dream. But if you don’t know what it costs to keep your team employed, you will always stress about payroll because your pricing does not truly reflect your cost of labor.

✨ Want help reviewing your payroll and setting up your STOP bank accounts? Our QuickBooks Certified Bookkeepers would love to support you.
📚 Prefer to DIY? My book and workbook are available on Amazon, they’ll walk you through your expenses, STOP Method™ transfers, and pricing with profit.
👉 Because at the end of the day, cash flow isn’t luck, it’s strategy.