Can I afford to hire or buy this?
The true cost after tax relief, and what your bank balance does month by month for the next 12 months if you go ahead.
Your answer
Enter the pay or the price, and your profit and cash now, to see your cash month by month.
About this calculator
For business owners weighing up taking someone on or buying something big: a van, equipment, a car or a fit-out. It shows the cost after tax relief and whether your cash stays above zero over the next 12 months.
What happens to your answers
We don’t keep them. Your answers go to our server to do the sums and aren’t stored or logged. If you copy a link to your answers, they’re in the link itself, so only share it with people you trust.
How it’s worked out
Hiring: we add employer's National Insurance (15% on pay over £5,000, less any Employment Allowance you have to use) and your workplace pension payment to their pay. Buying: we count what you pay in the first 12 months, in cash in month 1 or in equal finance repayments, and the tax relief you get this year through capital allowances, plus any interest.
The tax relief is the tax on 12 months of your profit, less the tax once the cost comes off. You can enter your own rate instead. The true cost is what you pay less that relief.
Your cash each month is the cash before, plus your profit, less the cost after relief, plus any extra money it brings in from the month it starts, after the tax on it. We spread the relief and that tax evenly over the year, though really they come through your tax bill later, and we don't count VAT, your other bills or money you take out.
Worked example
On these figures your cash never falls below today's £20,000 over the next 12 months: the lowest month-end is £23,971, in month 1.
2026/27 · limited company · profit £6,000 a month · cash £20,000 · hire at £28,000 a year, 37.5 hours a week · tax relief worked out
| Their yearly pay | £28,000 |
|---|---|
| Employer's National Insurance: 15% on pay over £5,000 | + £3,450 |
| Workplace pension: 3% of £21,760 qualifying earnings (pay between £6,240 and £50,270) | + £653 |
| What they cost a year, before tax relief | £32,103 |
| Corporation Tax saved: the tax on £72,000 of profit (12 × £6,000) less the tax once £32,103 comes off | − £7,750 |
| True cost over 12 months, after tax relief | £24,353 |
| True cost a month (÷ 12). The relief works out at 24.1% of the £32,103 taken off profits | £2,029 |
| Extra sales needed a month to pay for itself: the extra sales are taxed too (24.1% on about £2,675 a month), so £2,029 ÷ (1 − 24.1%) | £2,675 |
| The extra money you expect, £3,000 a month, less 24.4% tax on it | £2,268 |
| Cash in the bank now | £20,000 |
| Month 1: + £6,000 profit − £2,675 paid + £646 tax relief | £23,971 |
| Month 2: + £6,000 profit − £2,675 paid + £646 tax relief | £27,941 |
| Month 3: + £6,000 profit − £2,675 paid + £646 tax relief + £2,268 extra money in after tax | £34,180 |
| Month 4: + £6,000 profit − £2,675 paid + £646 tax relief + £2,268 extra money in after tax | £40,419 |
| Month 5: + £6,000 profit − £2,675 paid + £646 tax relief + £2,268 extra money in after tax | £46,657 |
| Month 6: + £6,000 profit − £2,675 paid + £646 tax relief + £2,268 extra money in after tax | £52,896 |
| Month 7: + £6,000 profit − £2,675 paid + £646 tax relief + £2,268 extra money in after tax | £59,135 |
| Month 8: + £6,000 profit − £2,675 paid + £646 tax relief + £2,268 extra money in after tax | £65,373 |
| Month 9: + £6,000 profit − £2,675 paid + £646 tax relief + £2,268 extra money in after tax | £71,612 |
| Month 10: + £6,000 profit − £2,675 paid + £646 tax relief + £2,268 extra money in after tax | £77,851 |
| Month 11: + £6,000 profit − £2,675 paid + £646 tax relief + £2,268 extra money in after tax | £84,089 |
| Month 12: + £6,000 profit − £2,675 paid + £646 tax relief + £2,268 extra money in after tax | £90,328 |
Worked out using HMRC's published rates for the 2026/27 tax year (6 April 2026 to 5 April 2027), on a yearly basis.
Questions people ask
Why is the true cost lower than what I pay?
Pay, National Insurance, pension and interest come off your profit before tax, and so do capital allowances on things you buy. So part of the cost comes back as a lower tax bill. That's paid later, so your bank feels the full cost first.
Why are the extra sales needed more than the true cost?
Extra sales are taxed, just as the cost gets tax relief. So the sales it needs are the true cost a month before the tax on them is taken off, which comes to about what it costs before relief.
Should I pay cash or use finance?
We can't advise on borrowing. The calculator shows what each does to your cash: cash avoids interest but takes the money out in one go; finance spreads it but adds interest.
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