Startup Cost Calculator

What counts as a startup cost

Before a business can cover its own expenses, there are costs you have to pay up front, and these are your startup costs. The calculator separates them into two groups, since each kind behaves in its own way.

• One-time costs are paid once, mostly before launch: incorporation and legal fees, licences and permits, computers and equipment, a website and brand, first inventory, deposits on rent and utilities, and launch marketing.
• Ongoing costs are paid every month: rent, salaries, software, insurance, marketing, accounting. You need enough cash to pay them for the months before revenue covers them.

The U.S. Small Business Administration makes the same split in its guide to calculating startup costs. What most first estimates miss is the second group: founders price the launch but forget the months of running costs that follow it.

The formula

Startup capital = One-time costs + (Monthly costs × Months to cover) + Contingency

Monthly costs include your operating costs and the fully loaded cost of the team. Contingency is a percentage of the rest, for costs you have not thought of yet. There are always some.

Employee cost: salary is only part of it

An employee costs more than their salary. In the US, the employer pays its own share of Social Security and Medicare, 7.65% of wages (see the IRS guide to Social Security and Medicare withholding), plus federal and state unemployment tax and workers’ compensation insurance. On top of that come benefits: health insurance, retirement contributions and paid leave.

The Bureau of Labor Statistics measures this every quarter. In its Employer Costs for Employee Compensation release for June 2026, wages and salaries were 70% of what private employers spent on compensation, and benefits the other 30%. Put differently, benefits and payroll taxes added about 43% on top of wages for the average private employer.

Fully loaded cost = Salary × (1 + Employer cost %)

Startups often come in lower than the average, because they offer fewer benefits in the early years. The calculator uses 30% as a default. Use 15–20% for a lean team with only the legally required costs, and 35–45% if you offer full health cover and a retirement plan. Outside the US, look up your country’s employer social contributions, which range from under 10% to over 40% of salary.

Worked example: a small software startup

Two founders plan to build a software product. One takes a reduced salary of $50,000, and they hire one developer at $95,000. They want six months of costs in the bank before they expect meaningful revenue, plus a 10% buffer.

Notice that the one-time costs are only 13% of the total. Six months of payroll, $94,250, is almost five times the launch budget. That pattern is typical for any business that pays people before it earns money, and it is why the months-to-cover number matters so much. Try 9 or 12 months in the calculator and see how the total moves.

Typical costs by type of business

• Online and software businesses: low one-time costs, high payroll. The biggest decision is how many months of salaries to fund.
• E-commerce and physical products: inventory is the big one-time cost, and you need to reorder before the first batch has sold. Include shipping, packaging and returns.
• Restaurants, cafés and retail: fit-out, equipment and deposits on a lease can dominate. Permits and inspections take time, and rent often starts before you open.
• Service businesses and consultancies: often the cheapest to start. The main cost is the founder’s time before clients pay, so include your own living costs.

Common mistakes

• No salary for the founders. If you need money to live on, put it in. Otherwise the plan assumes you can work for free until the business is profitable.
• Too few months of runway. Sales cycles, product delays and slow first months are the rule, not the exception. Six months is a minimum for most businesses, and 12 to 18 months is safer if you plan to raise money later.
• Salary instead of fully loaded cost. Budgeting a $95,000 hire at $95,000 underestimates the real cost by tens of thousands of dollars a year.
• Forgetting payment timing. Customers who pay in 30 or 60 days mean you fund that gap. Suppliers who want payment up front make it bigger.
• No contingency. Something always costs more or takes longer. A 10–20% buffer is standard.

How to fund your startup costs

Once you know the number, you can decide how to raise it: savings, friends and family, a bank loan or SBA-backed loan, grants, or equity investment from angels or a pre-seed fund. The amount changes the options. A $20,000 launch can be bootstrapped; $150,000 with salaries usually cannot. Lenders and investors will ask to see how you arrived at the figure, so keep the breakdown.

Next, check how the money holds up once you start selling. The burn rate and runway calculator shows how long your cash lasts as revenue grows, and the break-even calculator shows how many sales cover your monthly costs.

Turn your cost list into a budget

A startup cost estimate is the first page of a budget. In Cuttles, you enter these costs, your team and your expected revenue once, and the app calculates burn, runway and break-even month by month. The budget becomes the financial section of your business plan, ready to share with a bank or investor. Every plan starts with a 7-day free trial.

Employer cost percentages are general estimates, not tax advice. Payroll taxes and required benefits depend on your country, state and the type of employment.