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AE Break-Even Calculator

When does your first AE pay for themselves? Founders budget the salary and forget the ramp. This is the actual math: loaded cost, ramp curve, and the month the hire turns cumulative-positive.

Your numbers

On-target earnings (OTE, annual)

Base plus variable at 100% attainment. We load this by 1.25x for taxes, benefits, and tools.

Annual quota (new ARR)

Healthy velocity ratio is 4x to 5x OTE. The verdict below checks this.

Gross margin (%)

Ramp to full productivity (months) With a documented playbook: 4-5 months. Without one: 6-8. Be honest.

Expected steady-state attainment (%) Use what your team actually hits, not 100%.

One-time hiring cost

Recruiter fee, signing bonus, equipment. Zero if you sourced them yourself.

The break-even math

Cumulative break-even —

Verdict —

Fully loaded monthly cost —

Monthly margin at full productivity —

Monthly net once ramped —

First-year net contribution —

Quota-to-OTE ratio —

How it's computed: loaded cost is OTE × 1.25 ÷ 12. Productivity ramps linearly to 100% over your ramp months, then holds. Each month contributes quota × attainment × margin ÷ 12, scaled by that month's productivity. Break-even is the first month cumulative contribution covers cumulative cost plus the one-time hiring cost. Full walkthrough with a worked example in the break-even math post.

Break-even past month 10? The fix is rarely a cheaper rep. It's usually ramp time, and ramp time is a playbook problem: reps ramp fast into a documented system and slowly into a founder's head. That's a fixable gap.

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AE Break-Even Calculator

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