New insurance producer breakeven calculator: when does a hire pay for themselves?
A new producer breaks even in the month the commission their new business brings the agency has covered everything they’ve cost. Enter their pay, their commission share, how long they take to ramp and what they’ll write once ramped, and see the month they get there. Nothing you type is saved.
Example — change these
Your hire
Rises in equal steps, full from month 6.
Results
EstimateCovers their monthly cost from
Month 5
Breakeven month
Month 14
- Most you fund before breakeven
- $7,100
- Monthly premium needed once ramped
- $37,500
- Steady state: what covers fixed pay and extra costs each month, before renewals.
At these numbers, this hire covers their monthly cost from month 5 and breaks even in month 14. The most you fund before breakeven is $7,100.
See every month
| Month | New premium | Revenue | Cost | Net | Net to date |
|---|---|---|---|---|---|
| One-time hiring cost | −$1,500.00 | ||||
| 1 | $8,000.00 | $800.00 | $3,160.00 | −$2,360.00 | −$3,860.00 |
| 2 | $16,000.00 | $1,600.00 | $3,320.00 | −$1,720.00 | −$5,580.00 |
| 3 | $24,000.00 | $2,400.00 | $3,480.00 | −$1,080.00 | −$6,660.00 |
| 4 | $32,000.00 | $3,200.00 | $3,640.00 | −$440.00 | −$7,100.00 |
| 5 | $40,000.00 | $4,000.00 | $3,800.00 | $200.00 | −$6,900.00 |
| 6 | $48,000.00 | $4,800.00 | $3,960.00 | $840.00 | −$6,060.00 |
| 7 | $48,000.00 | $4,800.00 | $3,960.00 | $840.00 | −$5,220.00 |
| 8 | $48,000.00 | $4,800.00 | $3,960.00 | $840.00 | −$4,380.00 |
| 9 | $48,000.00 | $4,800.00 | $3,960.00 | $840.00 | −$3,540.00 |
| 10 | $48,000.00 | $4,800.00 | $3,960.00 | $840.00 | −$2,700.00 |
| 11 | $48,000.00 | $4,800.00 | $3,960.00 | $840.00 | −$1,860.00 |
| 12 | $48,000.00 | $4,800.00 | $3,960.00 | $840.00 | −$1,020.00 |
| 13 | $48,000.00 | $4,800.00 | $3,960.00 | $840.00 | −$180.00 |
| 14 | $48,000.00 | $4,800.00 | $3,960.00 | $840.00 | $660.00 |
| 15 | $48,000.00 | $4,800.00 | $3,960.00 | $840.00 | $1,500.00 |
| 16 | $48,000.00 | $4,800.00 | $3,960.00 | $840.00 | $2,340.00 |
| 17 | $48,000.00 | $4,800.00 | $3,960.00 | $840.00 | $3,180.00 |
| 18 | $48,000.00 | $4,800.00 | $3,960.00 | $840.00 | $4,020.00 |
| 19 | $48,000.00 | $4,800.00 | $3,960.00 | $840.00 | $4,860.00 |
| 20 | $48,000.00 | $4,800.00 | $3,960.00 | $840.00 | $5,700.00 |
| 21 | $48,000.00 | $4,800.00 | $3,960.00 | $840.00 | $6,540.00 |
| 22 | $48,000.00 | $4,800.00 | $3,960.00 | $840.00 | $7,380.00 |
| 23 | $48,000.00 | $4,800.00 | $3,960.00 | $840.00 | $8,220.00 |
| 24 | $48,000.00 | $4,800.00 | $3,960.00 | $840.00 | $9,060.00 |
| 25 | $48,000.00 | $4,800.00 | $3,960.00 | $840.00 | $9,900.00 |
| 26 | $48,000.00 | $4,800.00 | $3,960.00 | $840.00 | $10,740.00 |
| 27 | $48,000.00 | $4,800.00 | $3,960.00 | $840.00 | $11,580.00 |
| 28 | $48,000.00 | $4,800.00 | $3,960.00 | $840.00 | $12,420.00 |
| 29 | $48,000.00 | $4,800.00 | $3,960.00 | $840.00 | $13,260.00 |
| 30 | $48,000.00 | $4,800.00 | $3,960.00 | $840.00 | $14,100.00 |
| 31 | $48,000.00 | $4,800.00 | $3,960.00 | $840.00 | $14,940.00 |
| 32 | $48,000.00 | $4,800.00 | $3,960.00 | $840.00 | $15,780.00 |
| 33 | $48,000.00 | $4,800.00 | $3,960.00 | $840.00 | $16,620.00 |
| 34 | $48,000.00 | $4,800.00 | $3,960.00 | $840.00 | $17,460.00 |
| 35 | $48,000.00 | $4,800.00 | $3,960.00 | $840.00 | $18,300.00 |
| 36 | $48,000.00 | $4,800.00 | $3,960.00 | $840.00 | $19,140.00 |
Agency Edge’s Employee ROI does this for every person on your team, from the pay and sales you record.
Your numbers are saved in the link, so you can bookmark it or send it to a partner.
See it for every person, from the day they start.
In Agency Edge, Employee ROI sets what each team member costs against the revenue their sales bring the agency, shows net to date, and the month they broke even.
How we work it out
For each month from the hire, up to the months you choose:
- New premium = the premium once ramped × the month ÷ the months to ramp, until the month they’re ramped; the full amount after that
- Renewals (if counted) = each earlier month’s new premium, every 12 months after it was written × the commission rate × the renewal commission × the retention, once for each year
- Revenue = new premium × the agency commission rate + renewals
- Cost = fixed pay + extra costs + revenue × their commission share
- Net = revenue − cost
- Net to date = every month’s net so far − the one-time hiring cost
- Covers their monthly cost from = the first month revenue is at least cost
- Breakeven month = the first month net to date reaches $0
- Most you fund before breakeven = the lowest net to date before that month
- Monthly premium needed once ramped = (fixed pay + extra costs) ÷ (commission rate × (1 − their share))
The month table shows dollars and cents; the headlines round to whole dollars. Where a figure would divide by zero — a 0% commission rate, or a 100% share — it shows “—”.
How to use this calculator
- Enter their fixed monthly pay and their commission share. Both are in the offer or comp plan: the salary or draw, and the percentage of the agency’s commission on their sales that they earn.
- Add the extra monthly costs — payroll taxes, benefits, licensing — from your payroll records, and any one-time hiring cost such as recruiting or training.
- Enter how long they’ll take to ramp and what they’ll write once ramped, from the goals you set them.
- Enter your agency commission rate from your carrier commission schedules, and turn on renewals if you want them counted.
Checking whether the pay itself is in line with what the team brings in? Read what’s a healthy salary-to-revenue ratio.
Covering their monthly cost vs breaking even
These are two different months, and they’re easy to mix up. A hire covers their monthly cost in the first month the commission their business brings the agency is at least what they cost that month — at the example’s numbers, month 5. That isn’t the month you have your money back. Every month before it left a gap you funded, on top of the hiring cost. The breakeven month is when net to date gets back to $0: month 14 in the example, after you’ve funded as much as $7,100.
What changes the breakeven month
Start with the monthly premium needed once ramped: (fixed pay + extra costs) ÷ (commission rate × (1 − their share)). In the example that’s $3,000 ÷ (10% × 80%) = $37,500 a month. Every dollar a ramped hire writes above it wins back the months you funded; a hire who ramps to just above it takes a long time to get there, and one who never reaches it never covers their monthly cost.
Small changes move the month a long way. At the example’s numbers, one more month to ramp moves breakeven from month 14 to month 16 and adds $1,171 to the most you fund. $500 more a month in fixed pay moves it to month 33. Writing $40,000 a month once ramped instead of $48,000, the hire covers their monthly cost from month 6 but doesn’t break even within 36 months.
Salary, draw or commission?
How you pay a new producer changes the answer in two ways. Fixed pay — a salary or a draw — is a cost every month, whatever they write, so it’s what the ramp has to win back. A commission share grows with what they write: it costs little while they ramp, but it takes a slice of every dollar once they’re ramped, which raises the premium they need. A draw that’s later taken back from commission is cash you fund while they ramp, so enter it as fixed pay; the calculator doesn’t take it back.
To work out a producer’s commission on a real month, try the free producer commission calculator. For the choices behind the plan, read how to pay insurance producers.
Track it for real with Employee ROI
This calculator plans a hire. Once they start, Agency Edge’s Employee ROI follows the real one. You enter each person’s pay with a start date, and it sets what they cost the agency — base pay, commission and any service fee — against the revenue their sales bring in, modelled from your office’s own rates. It shows net to date, month by month, and the month they broke even. Read team salaries and Employee ROI and how pay works.
See commission tracking software and sales tracking software for agencies. Buying internet leads for a new hire? Try the free lead ROI calculator.
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Before you ask
How long does a new insurance producer take to break even?
It depends on what they cost, how long they take to ramp and what they write once ramped. Enter your own numbers and the calculator works out the month.
What’s the difference between covering their monthly cost and breaking even?
Covering their monthly cost is the first month the commission their business brings the agency is at least what they cost that month. Breaking even comes later: it’s the month the running total, after everything you funded while they ramped, gets back to $0.
What costs should I include?
Their fixed pay, payroll taxes, benefits and licensing, plus one-time costs like recruiting and training. Their commission is worked out from the share you enter.
What commission rate should I use?
Your agency’s own rate on the business they’ll write, from your carrier commission schedules. The figures the page opens on are example numbers; replace them with yours.
Does it count renewals?
Only if you turn it on. Then each month’s new business renews every 12 months, at the renewal commission and retention you enter.
Does this work for captive and independent agencies?
Yes. The math is the same; use your own numbers.
Is my data saved?
No. It’s worked out in your browser, and your numbers live only in the link. If you ask us to email your results, we keep your email address to send them.
Can Agency Edge track this for each team member?
Yes. Employee ROI sets each person’s cost against the revenue their sales bring the agency, shows net to date, and the month they broke even.