Free HR calculator
Temp-to-Hire Breakeven Calculator
Fill one role three ways and see the first-year cost of each. Hire direct, run a temp-to-hire trial and convert, or pay a direct placement fee. The calculator prices the trial, the declining buyout, and the waiver. It then tells you whether converting now beats riding the bill rate to the fee waiver.
Before you start
What you will need. Annual salary of the role, Temp hourly pay rate, Hours per week, Trial weeks before conversion
The role and your agreement terms
What the right path is worth
Breakeven and waiver read
The method
Direct hire, temp-to-hire, or direct placement
Every staffed role reaches the same fork. You can hire directly and carry salary plus burden from day one. You can run a temp-to-hire trial, paying the agency bill rate for the trial weeks and then converting. A buyout fee applies if you convert before the waiver threshold. Or you can pay a direct placement fee and put the person straight on payroll. That fee is typically 15% to 25% of first-year salary, with 20% as the published benchmark. Each path prices the same first year differently, and the cheapest one depends on your terms, not on a rule of thumb.
How this is calculated
How the buyout math works
Most staffing agreements price conversion as a percentage of first-year salary, in the published 10% to 25% range. The fee falls as the worker logs hours on the assignment. Common waiver thresholds run from about 520 hours, roughly thirteen weeks of full-time work, to 1,000 hours or more. This calculator models the fee declining straight-line to zero at your waiver threshold, so hours already worked reduce what you owe today. The paid workbook also models agreements where the fee holds flat until the waiver.
The breakeven question the tool answers
While a worker is on the bill rate, you pay an hourly premium over what the same person would cost on your loaded payroll. While the fee is declining, every hour worked also burns down the buyout. The breakeven read compares the two. When the hourly premium is larger than the fee decline per hour, converting now and paying the remaining buyout is the cheaper move. When the fee declines faster than the premium accrues, riding to the waiver wins. The read states which side your numbers land on and by how much.
What sits outside the model
The comparison prices the first year of one role. It does not price the recruiting effort a direct hire takes. Nor the risk that a wrong hire costs far more than any fee, or the classification and co-employment questions long assignments raise. Treat the output as the financial baseline that disciplines the negotiation, not the whole decision.
Carry this into the decision
Decide across ten open roles, not one
The paid Excel workbook adds a role portfolio view, a buyout schedule that also models flat-until-waiver fees, and a sourced assumptions tab.
$29. 30 days. Reply to your receipt or email support@truestephr.com for a full refund. No form or explanation is required, and you keep the files.
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Put your own numbers in and read the result on screen.
Put your own numbers in and read the result on screen.
This tool estimates from the figures you enter. It is general information rather than legal, tax, or accounting advice, so check the result against your own records before you rely on it.