About this tool
ROI calculator, explained
This ROI calculator puts a dollar value on the time a tool saves a team and sets it against what the tool costs. Enter the team size, hours saved, hourly cost and price per seat to see the yearly value of that time, the net gain and how fast the tool pays for itself.
How to use it
- 1Set Team size to the number of people who will use the tool, or start from Small team, Growing company or Enterprise.
- 2Set Hours saved per person, per week, ideally measured on a small pilot, and the Loaded hourly cost: what one hour of a team member costs the company, not just their pay.
- 3Under Your product, enter the Price per seat, per month and the Working weeks per year once holidays and leave are taken out.
- 4Read Yearly time saved, then the net gain, return on spend and payback time. Click Compare with a scenario B to test a second set of numbers next to the first, and Copy link to share both.
How it works
How the value is calculated
Hours given back per year are the team size multiplied by the hours saved per person each week and by the working weeks per year, 48 by default rather than 52, to leave room for holidays and leave. Yearly time saved is those hours multiplied by the loaded hourly cost.
The product cost per year is the team size times the price per seat, times 12 months. The net gain is the yearly time saved minus that cost. Return on spend is the yearly time saved divided by the cost, shown as a multiple, and the payback time is the cost divided by the value of one working week of saved time.
With the starting numbers, 25 people saving 3 hours a week for 48 weeks at $60 an hour give back 3,600 hours, worth $216,000 a year. At $25 per seat per month the product costs $7,500 a year, so the net gain is $208,500, the return on spend is 28.8× and the product pays for itself in 1.7 weeks.
The breakdown table shows hours saved, the value of that time, the product cost and the net gain per week, per month and per year, and downloads as a CSV. The result is the value of time, not cash saved: time turns into money when it goes into more output, faster delivery or a hire you no longer need.
Yearly time saved = team size × hours saved per person per week × working weeks × loaded hourly cost. Payback in weeks = yearly product cost / (yearly time saved / working weeks).
When to use it
Ways people use it
Building a business case
Turn a feature list into a yearly dollar figure and a payback time a manager or finance lead can weigh against the price on the invoice.
Pricing pages
Let prospects enter their own team size and see the value for their company, next to the plans they are comparing.
Comparing plans or tools
Use scenario B for a second price or a second estimate of hours saved, and read the difference in net gain and payback time side by side.
Automation projects
Estimate what automating a manual process is worth before spending time building it, using the hours the process takes today and a price of zero.
FAQ
Questions people ask
How do you calculate ROI for software?
Estimate the yearly value the software creates, subtract its yearly cost, and divide by that cost. For productivity tools most of the value is time: people × hours saved × hourly cost. An ROI of 100% means the value is twice the cost, which this calculator shows as a return on spend of 2×.
What is a loaded hourly cost?
The full cost of one hour of an employee's time to the company: salary plus benefits, payroll taxes, equipment and a share of overhead. It is higher than salary divided by hours worked, which is why business cases use it.
How do I estimate the hours a tool saves?
Measure it. Time the task before and after on a small pilot, or ask the people who do it to log their time for a week. Without data, start low: a conservative estimate that holds up is more convincing than a large one that gets challenged.
Is time saved the same as money saved?
Not directly. Saved hours only become money when they are spent on work that creates value or replace hours you would otherwise pay for. The figure here is the value of the time, which is the honest basis for a business case.
How do I calculate the payback period?
Divide the tool's yearly price by the value of the time it saves in one working week. The result is the number of weeks before it has paid for itself, which this calculator shows as Pays for itself in. Divide by four and a third for an approximate number of months.