Planning

Can I afford to hire a helper?

· Last updated Nov 2026 · General information, not tax, legal, or insurance advice.

Short answer: you can afford a helper when the extra work they let you bill covers their full cost, not just their wage. For a $20-an-hour helper, plan on a true cost of roughly $45,000 to $50,000 a year depending on your state and insurance, and figure out how many more billable hours, or how many more jobs, you need to cover it.

Why rules of thumb mislead

You’ll see rules like “hire when you’re turning away work” or “labor should be X% of revenue.” We couldn’t find an official source for any single percentage that fits plumbers, electricians, and HVAC shops alike, and margins differ a lot between service calls and new construction. A break-even calculation with your own prices is more honest and takes ten minutes.

Step 1: find the true annual cost

Start with the wage and add the employer costs. For a full-time helper at $20 an hour:

• Wages: $41,600
• Employer FICA (7.65%): $3,182.40, per IRS Publication 15
• FUTA (net 0.6% of $7,000): $42
• State unemployment: hypothetical $270 (2.7% of a $10,000 base; use your state’s numbers)
• Workers’ comp: hypothetical $1,248 ($3.00 per $100; get a quote)
• Payroll software: $660 (Gusto Simple public price, one person)
• Tools, boots, safety gear: your estimate, say $500

Total: about $47,502. If the helper drives a company vehicle, add fuel, insurance, and payments. The true-cost calculator builds this for your state.

Step 2: count billable hours

A full-time helper is paid for about 2,080 hours a year. They won’t all be billable: there’s drive time, supply runs, rain days, training, and holidays if you pay them. Pull a month of your own job records to estimate. As an assumption for this example, say 1,600 hours are billable.

Cost per billable hour = $47,502 ÷ 1,600 = about $29.69. That’s what each billed helper hour must cover before overhead or profit.

Step 3: compare it with what you can bill

There are two common ways a helper pays off:

1. Billing their hours. If you bill helper time at, say, $65 an hour, each billable hour leaves $35.31 toward overhead and profit. Across 1,600 hours that’s about $56,500 a year.
2. Finishing jobs faster. If the helper doesn’t bill separately but lets you finish more jobs, estimate extra jobs per week. Say your average job leaves $400 in gross profit after materials. You need about $47,502 ÷ $400 ≈ 119 more jobs a year, or about 2.3 a week, to break even.

If your answer is comfortably above break-even with work already in your pipeline, you can probably afford the hire. If it only works when every week is perfect, wait, or start part-time.

Step 4: plan for cash flow

Payroll is due every pay period, but customers may pay in 30 days. Before the first day, set aside enough cash to cover at least several pay periods of wages plus employer taxes, and know your first tax deposit date. Employer FUTA and SUTA are front-loaded early in the year, which can make the first months feel more expensive.

Lower-risk ways to start

• Hire part-time first. Taxes scale with wages; check whether your state’s workers’ comp minimum premium still applies.
• Raise prices or add a helper rate to quotes before the hire.
• Don’t pay a helper on a 1099 to save money if they work under your direction. See 1099 vs W-2.

Next, see how much to pay a helper and the SBA hire and manage employees guide for general hiring steps.

Frequently asked questions

Federal figures were checked against 2026 IRS Publication 15 and the linked official pages in November 2026. Rows marked hypothetical are examples only. State rules and rates vary; confirm with your state agencies, an insurance agent, and your accountant before you hire.