You've been short-staffed for months. The diary is full. Associates and admin are stretched between clients, and you're the overflow valve. Someone on the team has already asked when you're posting the role. The instinct is to hire first and sort the numbers later.
I see that pattern a lot in growth-stage practices - legal, insurance, dental, medical - sitting somewhere between about $1M and $10M. The hire feels obvious. The cash question is quieter, and it usually shows up after the offer letter.
This isn't a pep talk about "investing in people." It's the affordability test: fully loaded cost, how long the person takes to earn their keep, and what the bank needs to cover before the hire pays for itself.
Base salary is not the cost of the hire
When owners say they can "afford" a hire, they often mean the base salary fits the P&L at a glance. Payroll doesn't work that way.
Take an illustrative admin or junior associate role on a $80,000 base. As at 16 September 2026, the super guarantee rate is 12%. On that base, SG alone is about $9,600 a year. Add typical on-costs - workers compensation, payroll tax where it applies, leave loading or accrual, recruitment fees, equipment, software seats, training time - and a fully loaded figure in the $100k-$115k band is common before you've funded a single productive month.
That doesn't mean the hire is wrong. It means the decision should sit against ~$110k of annual employment cost, not the $80k line on the job ad. If your mental model is still base-only, you're understating the fixed cost you're about to lock in.
Trades businesses face the same fully loaded maths; the lead cast here is a staffed practice, because that's where associate and admin hires usually land first.
Ramp is real - and cash feels it before the P&L does
New people rarely arrive at full contribution on day one. An associate building a book, or admin learning your PMS, referral pathways, and billing quirks, often needs months before their work covers their cost in a clean sense.
Illustrative shape: you hire at that ~$110k fully loaded run-rate. In months one to three, useful output might sit at roughly 40%, 60%, then 80% of a steady-state person - not because anyone failed, but because practices have systems. If "pays for itself" means contribution roughly matching loaded cost, you may be looking at four to six months, not the first pay cycle.
On a cash view, that gap matters more than the annualised salary. You're funding wages, super (as at 16 September 2026, still 12% of the relevant earnings base), and on-costs while revenue or recovered time lags. Profit on a yearly forecast can look fine while the operating account feels tight every fortnight.
The 90-day cash question
I prefer a short, boring cash sketch over a heroic annual spreadsheet.
Ask: from offer accepted to the end of the first 90 days, how much cash leaves for this person before their work reliably replaces or adds capacity you can bill or reclaim?
Rough illustration on the same hire:
- Loaded cost over 90 days at ~$110k annualised ~ $27,500 (before recruitment already paid).
- If ramp means the practice only recovers the equivalent of, say, $12k-$16k of value or billable capacity in that window, the cash "float" on the hire alone is on the order of $11k-$15k - funded from working capital, not from a future P&L line that hasn't landed yet.
Add timing friction common in practices: insurers and clients that pay on 45-60 day cycles, GST and PAYG rhythms, and the fact that wages don't wait for those receipts. A hire that "works on paper" can still squeeze the next quarter if debtor days are already long.
The point isn't to scare you off hiring. It's to separate we need the person from we can fund the gap until they settle.
Capacity pressure isn't the same as hire-ready
Full books are a signal. They are not, by themselves, a green light.
Sometimes the constraint is pricing or mix, not headcount. Sometimes admin load is high because billing and follow-up are messy, and another admin will inherit the mess. Sometimes an associate hire is the right move, but only after you know which days, rooms, or fee types are actually constrained.
Owner questions I use before the job ad goes live:
- What work will this person take off the diary in the first 90 days - named, not vague?
- What is the fully loaded annual cost (base, 12% SG as at 16 September 2026, on-costs, tools)?
- What does cash look like for 90 days if ramp is slower than the optimistic version?
- Are receivables and WIP already stretching working capital?
- If this hire is delayed 8-12 weeks, what breaks - and what merely stays uncomfortable?
- Are you hiring to fix a process problem that another seat won't fix?
You're aiming for a clear yes/no you can defend: can we fund this person through ramp without pretending base salary is the whole story?
Owner checklist: affordability before the advert
Before you post the role - or promote from within into a bigger package - walk this list with whoever owns your numbers:
| Check | Your note |
|---|---|
| Fully loaded annual cost written down (not base alone) | |
| Super included at 12% as at 16 September 2026 on the relevant base | |
| 90-day cash out for wages/super/on-costs estimated | |
| Honest ramp assumption (not "productive from week one") | |
| Debtor / insurer timing already in the cash view | |
| Room, chair, licence, or software capacity confirmed | |
| Alternative: overtime, contractor cover, or process clean-up considered | |
| Who owns onboarding so ramp isn't accidental |
No checklist guarantees a hire will "pay for itself." It only makes the bet visible.
What to do next
If you're short-staffed and the role feels overdue, treat affordability as a cash and ramp question, not a vibe. Fully loaded cost and the first 90 days usually tell you more than the job title does.
If you want help lining up loaded cost, ramp, and working capital for a practice hire - run the numbers with me at Full Cycle Accounting and we can walk through your situation calmly.
This is general information only and doesn't take into account your objectives, financial situation or needs. Before acting on it, consider whether it's appropriate for you - or talk to me about your situation.