What counts as a "fully loaded" hourly rate?

Base salary plus employer taxes, benefits and overhead — typically 1.25 to 1.4 times the salary figure alone. Using bare salary understates the true cost of the time being saved.

Why is year-one ROI so much lower than the vendor's quoted figure?

Vendors typically quote the steady-state return, which excludes the one-off implementation cost. This tool shows both, because the year-one number — which includes that cost — is the one that determines whether the business case actually pays back quickly.

What if my team's hours saved is a guess?

Use the stress-test result. If halving your estimate still gives a reasonable payback period, the case doesn't depend heavily on getting that number exactly right. If it collapses, measure the time saving before committing rather than estimating it.

SaaS ROI Calculator

Estimate the payback period and net return on a SaaS subscription.

Runs entirely in your browser — nothing you enter is uploaded.

What the tool saves

People affected

Hours saved each

/week

Loaded hourly rate

Salary plus taxes and overhead

What the tool costs

Annual licence

Implementation

One-off, year one

Losses avoided

Annual, measurable only

Test the case before you present it

Halve the hours saved and the payback moves to 16 months. If the case survives that, it is reasonably robust. If it collapses, the time-saving estimate is doing all the work — and time savings are the most over-estimated input in any software business case.

Payback period

8 months

Payback inside a year — usually straightforward to approve.

Annual benefit£59,280

Year one cost£39,000

Year one ROI52%

Steady-state ROI147%

Steady state excludes implementation. It is the figure vendors quote — judge the case on year one.

How to use SaaS ROI Calculator

Fill in the number of people affected, hours each saves per week, and a fully loaded hourly rate under "What the tool saves".
Fill in the annual licence, one-off implementation cost, and any measurable losses avoided under "What the tool costs".
Read the payback period and ROI figures on the right.
Check the stress-test callout — it halves the hours-saved figure to show how robust the case actually is.

How this works

Return is the annual benefit divided by the annual cost, where cost includes far more than the licence fee. Implementation, data migration and training are counted in year one, which is why the first-year return is almost always worse than the steady-state figure and why vendors prefer to quote the latter. Benefits come from hours saved valued at a fully loaded labour rate, plus any measurable losses the software removes. Payback is the point at which cumulative benefit overtakes cumulative cost.

annual benefit = (hours saved/week × 52 × loaded hourly rate) + annual losses avoided; ROI = (benefit − cost) ÷ cost; payback months = cost ÷ (benefit ÷ 12)

Assumptions

Hours saved are genuinely redeployed to other work. If nobody's workload actually changes, the saving is theoretical and should not be counted.
The loaded hourly rate includes employer taxes, benefits and overhead — typically 1.25 to 1.4 times base salary.
Implementation and training are one-off year-one costs; the licence recurs.
Adoption is immediate and complete. Real rollouts ramp over months.
No discounting is applied, so multi-year totals are nominal rather than present values.

Worked example

A team of 10 saving 3 hours each per week, on a £24,000 annual licence with £15,000 implementation.

Hours saved per week: 30 (10 people × 3)
Loaded hourly rate: £38
Annual licence: £24,000
One-off implementation: £15,000
Result: Payback in about 8 months; 52% ROI in year one

Annual benefit is 30 × 52 × £38 = £59,280. Year-one cost is £39,000, giving a return of 52%. From year two the cost drops to £24,000 and the return rises to 147% — which is the number a vendor will quote, and the reason to look at both.

How to read the result

Judge the case on year-one payback, not the steady-state percentage. Anything paying back inside twelve months is usually straightforward to approve; beyond twenty-four months the assumptions need to hold for longer than most software stays in place. Test the result by halving the hours saved — if the case survives that, it is reasonably robust; if it collapses, the benefit estimate is doing all the work.

Limitations

Time savings are the most over-estimated input in any software business case. Measure them before committing where possible.
Excludes switching costs, integration maintenance, and the cost of migrating away later.
Nominal figures only — no discount rate or cost of capital is applied.
Does not model risk, vendor lock-in, or the consequences of the tool being withdrawn.

Frequently asked questions

What counts as a "fully loaded" hourly rate?: Base salary plus employer taxes, benefits and overhead — typically 1.25 to 1.4 times the salary figure alone. Using bare salary understates the true cost of the time being saved.
Why is year-one ROI so much lower than the vendor's quoted figure?: Vendors typically quote the steady-state return, which excludes the one-off implementation cost. This tool shows both, because the year-one number — which includes that cost — is the one that determines whether the business case actually pays back quickly.
What if my team's hours saved is a guess?: Use the stress-test result. If halving your estimate still gives a reasonable payback period, the case doesn't depend heavily on getting that number exactly right. If it collapses, measure the time saving before committing rather than estimating it.