How this calculator works
Building has a one-time cost made up of materials plus the loaded cost of staff time: gross salary, employer overhead and the months spent. Buying has a purchase price but no build effort. The annual net benefit is the saving from building after paying maintenance. If building costs more upfront, divide that extra by the annual net benefit to see how many years it takes to repay. The comparison ignores the resale value of either option and any revenue lost while staff build instead of doing their usual work.
Formula
Loaded monthly salary = annual salary / 12 × (1 + overhead rate). Staff cost = loaded monthly salary × employees × months. Total build cost = direct cost + staff cost. Annual net benefit = annual savings - annual maintenance. Years to repay = (total build cost - purchase price) / annual net benefit.
Worked example
Two employees earning $70,000 with 25% overhead cost $7,291.67 a month each, so three months of their time costs $43,750. Adding $8,000 of materials gives a $51,750 build cost. Against a $20,000 purchase price the extra is $31,750. Maintenance of $3,000 against $12,000 of savings leaves $9,000 a year, so the build repays its extra cost in 3.53 years.
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Frequently asked questions
What belongs in annual savings?
The recurring cost you avoid by building, such as subscription or licence fees, plus any extra revenue the custom build enables. Do not include one-time costs again; those belong in the purchase price or build cost fields.
Should I count staff time at full salary?
If the same staff would otherwise be paid, yes. Loading the salary with overhead captures benefits, workspace and equipment. If the work replaces no other billable activity, a lower or zero rate may better reflect the real cash cost, and you should say so in any business case.
What is missing from the comparison?
Risk, delivery time, support obligations, security and the cost of maintaining a custom system for years are not included. A build that is cheaper on paper can still lose if it delays the project or needs scarce skills to keep running.