Act on the result
Confirm ramp time, management burden and minimum supplier commitments before deciding.
Educational only: Business decision support, not accounting, tax or legal advice.
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Update policy: Reviewed when formulas or official dependencies change.
Scope: Market-neutral small-business planning using your own assumptions.
What this comparison calculator helps you decide
Best for
Businesses comparing outsourced delivery with the loaded capacity of an internal hire.
Outputs
Outsource cost, loaded hire cost, delivered capacity, option difference and crossover workload.
Start here
Use the same workload and service scope for both options before adding hiring or supplier risk costs.
Use a different tool when: Do not use this to test a hire against billable contribution; use Hiring Break-even Planner for that decision. Use this tool to compare outsourcing with the loaded cost and capacity of an internal hire.
Profit & break-even
Outsource vs Hire: outsource cost
Outsource cost, loaded hire cost, delivered capacity, option difference and crossover workload.
Amounts use the same currency as your inputs. No currency conversion is performed.
Outsource vs Hire
Compare incremental outsourcing and hiring costs at the required workload, including explicit capacity gaps and excluded sunk cost.
Your numbers stay in this browser
Enter the whole units required for the decision period.
Record committed cost for disclosure; the engine explicitly excludes it from the comparison. Use one consistent ex-tax currency basis.
Include only avoidable or new fixed cost for outsource. Use one consistent ex-tax currency basis.
Include only cost that changes per unit for outsource. Use one consistent ex-tax currency basis.
Enter the maximum whole units outsource can deliver in the period.
Include only avoidable or new fixed cost for hire. Use one consistent ex-tax currency basis.
Include only cost that changes per unit for hire. Use one consistent ex-tax currency basis.
Enter the maximum whole units hire can deliver in the period.
Decision result
Review the operating threshold and incremental comparison on the same entered capacity, cost and demand basis.
- Outsource incremental cost
- 8,600.00
- Hire incremental cost
- 10,200.00
- Lower-cost feasible option
- Outsource
- Cost crossover units
- 166 units
- Outsource capacity gap
- 0 units
- Hire capacity gap
- 0 units
- Excluded sunk cost
- 2,500.00
Scenario comparison
Each row names the assumption axis changed from the baseline.
ScenarioResultDifference
Entered scenario8,600.00Baseline
Lower Required units7,760.00-840.00
Higher Required units9,440.00840.00
Save these results, change an input, then compare the updated figures with this baseline.
The baseline is temporary in this tab and is not added to shared scenario links or generated reports.
Calculation details
View calculation detailsView the formulas and inputs used for these results.
Outsource incremental cost
Outsource incremental cost
outsource incremental fixed cost + required units × outsource incremental cost per unit, if capacity is sufficient8,600.00Result8,600.00
Uses the exact shared engine result and only the entered market-neutral operating assumptions. The engine retains raw precision; display formatting does not feed calculation.
Outsource vs Hire Comparison formulas →Inputs used by these formula steps
- Outsource incremental costUnits
- 120
- Outsource incremental costCurrent Sunk Cost
- 2,500
- Outsource incremental costLeft Incremental Fixed Cost
- 200
- Outsource incremental costLeft Incremental Variable Cost Per Unit
- 70
- Outsource incremental costLeft Capacity Units
- 220
- Outsource incremental costRight Incremental Fixed Cost
- 6,000
- Outsource incremental costRight Incremental Variable Cost Per Unit
- 35
- Outsource incremental costRight Capacity Units
- 220
Hire incremental cost
Hire incremental cost
hire incremental fixed cost + required units × hire incremental cost per unit, if capacity is sufficient10,200.00Result10,200.00
Uses the exact shared engine result and only the entered market-neutral operating assumptions. The engine retains raw precision; display formatting does not feed calculation.
Outsource vs Hire Comparison formulas →Inputs used by these formula steps
- Hire incremental costUnits
- 120
- Hire incremental costCurrent Sunk Cost
- 2,500
- Hire incremental costLeft Incremental Fixed Cost
- 200
- Hire incremental costLeft Incremental Variable Cost Per Unit
- 70
- Hire incremental costLeft Capacity Units
- 220
- Hire incremental costRight Incremental Fixed Cost
- 6,000
- Hire incremental costRight Incremental Variable Cost Per Unit
- 35
- Hire incremental costRight Capacity Units
- 220
Lower-cost feasible option
Lower-cost feasible option
compare the two exact incremental costs after capacity feasibilityleftResultOutsource
Uses the exact shared engine result and only the entered market-neutral operating assumptions.
Outsource vs Hire Comparison formulas →Inputs used by these formula steps
- Lower-cost feasible optionUnits
- 120
- Lower-cost feasible optionCurrent Sunk Cost
- 2,500
- Lower-cost feasible optionLeft Incremental Fixed Cost
- 200
- Lower-cost feasible optionLeft Incremental Variable Cost Per Unit
- 70
- Lower-cost feasible optionLeft Capacity Units
- 220
- Lower-cost feasible optionRight Incremental Fixed Cost
- 6,000
- Lower-cost feasible optionRight Incremental Variable Cost Per Unit
- 35
- Lower-cost feasible optionRight Capacity Units
- 220
Cost crossover units
Cost crossover units
ceiling((right fixed cost − left fixed cost) / (left unit cost − right unit cost)), when reachable within both capacities166 unitsResult166 units
Uses the exact shared engine result and only the entered market-neutral operating assumptions. The engine retains raw precision; display formatting does not feed calculation.
Outsource vs Hire Comparison formulas →Inputs used by these formula steps
- Cost crossover unitsUnits
- 120
- Cost crossover unitsCurrent Sunk Cost
- 2,500
- Cost crossover unitsLeft Incremental Fixed Cost
- 200
- Cost crossover unitsLeft Incremental Variable Cost Per Unit
- 70
- Cost crossover unitsLeft Capacity Units
- 220
- Cost crossover unitsRight Incremental Fixed Cost
- 6,000
- Cost crossover unitsRight Incremental Variable Cost Per Unit
- 35
- Cost crossover unitsRight Capacity Units
- 220
Outsource capacity gap
Outsource capacity gap
max(0, required units − outsource capacity)0 unitsResult0 units
Uses the exact shared engine result and only the entered market-neutral operating assumptions. The engine retains raw precision; display formatting does not feed calculation.
Outsource vs Hire Comparison formulas →Inputs used by these formula steps
- Outsource capacity gapUnits
- 120
- Outsource capacity gapCurrent Sunk Cost
- 2,500
- Outsource capacity gapLeft Incremental Fixed Cost
- 200
- Outsource capacity gapLeft Incremental Variable Cost Per Unit
- 70
- Outsource capacity gapLeft Capacity Units
- 220
- Outsource capacity gapRight Incremental Fixed Cost
- 6,000
- Outsource capacity gapRight Incremental Variable Cost Per Unit
- 35
- Outsource capacity gapRight Capacity Units
- 220
Hire capacity gap
Hire capacity gap
max(0, required units − hire capacity)0 unitsResult0 units
Uses the exact shared engine result and only the entered market-neutral operating assumptions. The engine retains raw precision; display formatting does not feed calculation.
Outsource vs Hire Comparison formulas →Inputs used by these formula steps
- Hire capacity gapUnits
- 120
- Hire capacity gapCurrent Sunk Cost
- 2,500
- Hire capacity gapLeft Incremental Fixed Cost
- 200
- Hire capacity gapLeft Incremental Variable Cost Per Unit
- 70
- Hire capacity gapLeft Capacity Units
- 220
- Hire capacity gapRight Incremental Fixed Cost
- 6,000
- Hire capacity gapRight Incremental Variable Cost Per Unit
- 35
- Hire capacity gapRight Capacity Units
- 220
Excluded sunk cost
Excluded sunk cost
current sunk cost disclosed but excluded from both incremental options2,500.00Result2,500.00
Uses the exact shared engine result and only the entered market-neutral operating assumptions. The engine retains raw precision; display formatting does not feed calculation.
Outsource vs Hire Comparison formulas →Inputs used by these formula steps
- Excluded sunk costUnits
- 120
- Excluded sunk costCurrent Sunk Cost
- 2,500
- Excluded sunk costLeft Incremental Fixed Cost
- 200
- Excluded sunk costLeft Incremental Variable Cost Per Unit
- 70
- Excluded sunk costLeft Capacity Units
- 220
- Excluded sunk costRight Incremental Fixed Cost
- 6,000
- Excluded sunk costRight Incremental Variable Cost Per Unit
- 35
- Excluded sunk costRight Capacity Units
- 220
Inputs used
- Required units
- 120
- Current sunk cost
- 2,500
- Outsource incremental fixed cost
- 200
- Outsource incremental cost per unit
- 70
- Outsource capacity
- 220
- Hire incremental fixed cost
- 6,000
- Hire incremental cost per unit
- 35
- Hire capacity
- 220
Open this calculator with preset values
This calculator supports documented, shareable scenario URLs. Compatible assistants and applications can construct links using the parameters below.
Scenario links contain only allowlisted numeric and closed-choice inputs shown in the URL; Margin101 excludes free text and identifying fields. Anyone you share the URL with can read those numbers, so do not include private or identifying data.
| Parameter | Meaning | Unit | Allowed values | Presence | Default |
|---|---|---|---|---|---|
| currentSunkCost | Record committed cost for disclosure; the engine explicitly excludes it from the comparison. Use one consistent ex-tax currency basis. | currency units/decision period, ex tax | 0 to 10000000 | Required | 2500 |
| leftCapacityUnits | Enter the maximum whole units outsource can deliver in the period. | units/period | 0 to 100000000 | Required | 220 |
| leftIncrementalFixedCost | Include only avoidable or new fixed cost for outsource. Use one consistent ex-tax currency basis. | currency units/decision period, ex tax | 0 to 10000000 | Required | 200 |
| leftIncrementalVariableCostPerUnit | Include only cost that changes per unit for outsource. Use one consistent ex-tax currency basis. | currency units/unit, ex tax | 0 to 10000000 | Required | 70 |
| rightCapacityUnits | Enter the maximum whole units hire can deliver in the period. | units/period | 0 to 100000000 | Required | 220 |
| rightIncrementalFixedCost | Include only avoidable or new fixed cost for hire. Use one consistent ex-tax currency basis. | currency units/decision period, ex tax | 0 to 10000000 | Required | 6000 |
| rightIncrementalVariableCostPerUnit | Include only cost that changes per unit for hire. Use one consistent ex-tax currency basis. | currency units/unit, ex tax | 0 to 10000000 | Required | 35 |
| units | Enter the whole units required for the decision period. | units/period | 0 to 100000000 | Required | 120 |
Outsource vs Hire: outsource cost
Compare the same delivered workload and service level rather than headline hourly rates.
Formula summary
- Primary formula
- compare the two exact incremental costs after capacity feasibility.
Data used here
- The estimate uses your inputs and the general business formula documented in the methodology.
Decision checks
Stress-test the decision
Retest slower hiring, higher utilisation requirements and supplier price changes.
When this estimate can be misleading
- Volumes, rates, capacity, time, costs and contribution are your records or scenarios; no benchmark or demand forecast is embedded.
- Keep all money and operating records on one consistent ex-tax basis and decision period.
- Incremental comparisons exclude disclosed sunk cost and do not guarantee demand, delivery capacity or a commercial outcome.
- This is educational business decision support, not accounting, tax, legal or financial advice.
- Compare the same delivered workload and service level rather than headline hourly rates.
Educational estimate, not advice. See all assumptions & limitations →
Related reading
Guides to interpret the decision and its assumptions.
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Frequently asked questions
How do I compare outsourcing with the loaded cost and capacity of an internal hire?
Confirm ramp time, management burden and minimum supplier commitments before deciding.
What should stay consistent when I compare the options?
Keep the time basis, units and included costs consistent across options, then verify the assumptions that create the largest difference.