Founder Salary Sustainability

How the math works

Five steps from MRR to "this is the salary you can pay yourself":

1. Gross profit: MRR × gross margin. The pool that exists after direct costs (hosting, payment fees, support time).
2. Operating profit: gross profit minus business expenses (tools, ads, contractors, hosting beyond margin). What remains for founders.
3. Per-founder pre-tax salary: operating profit ÷ founder count. Equal split by default; adjust manually if operating agreement says otherwise.
4. Per-founder after-tax salary: pre-tax × (1 − tax reserve). For US solo founders, 28–35% tax reserve covers self-employment tax (15.3%) + federal income (22–32%) + state.
5. Coverage ratio: after-tax salary ÷ personal expenses. The diagnostic. Anything below 1 means you're bleeding savings to keep the business running.

The runway correction. Maxing out founder salary at coverage 1.0× sounds like the answer — pay yourself exactly enough to live, reinvest the rest. But that ignores the runway buffer the business needs. Conventional wisdom: keep 6 months of operating expenses in the business bank account before maximizing personal pay. The calculator shows the theoretical maximum; subtract whatever you need to allocate toward business runway.

Math runs locally. Inputs never leave your browser. Source on github.

Real-world scenarios

• SaaS Metrics → Profitability — the dynamic version: when does compound MRR growth get you to day-job parity?
• Cloud Bill Estimator — infrastructure cost feeds directly into the gross-margin and business-expenses inputs of this calculator.
• Startup Runway — the buffer side of the coin: how long can you survive at current burn before MRR fills the gap?