What this calculator measures
To check whether the same budget can cover its fixed costs, pair this worksheet with the break-even revenue calculator.
The calculator measures corporate cash runway after a user-entered owner salary plan. Monthly owner employment cost equals annual gross salary divided by 12, plus employer payroll tax cost, plus employer benefit cost. Employer payroll tax and benefits are computed only from the rates and monthly dollar amounts entered by the user.
That is different from deciding what the salary should be. IRS materials treat wages and employment taxes as payroll matters, and IRS guidance says officer wages should generally be commensurate with duties. This tool does not determine reasonable compensation, withholding, employer payroll taxes, benefit eligibility, or any suggested amount to pay an owner.[3][4]
Runway formula and event timing
Net monthly burn equals monthly owner employment cost plus other monthly business burn minus monthly operating inflow. Available cash above reserve equals starting unrestricted business cash plus one-time cash change minus the optional reserve floor. If net burn is positive, runway months equals available cash above reserve divided by net monthly burn. If net burn is zero, the tool shows a no-burn state. If inflow exceeds costs, it shows a positive-cash-flow state instead of a runway quotient.
The month-by-month ledger uses one timing convention: it applies the one-time cash change at the start of month 1, then subtracts total costs and adds operating inflow for each modeled month. A different real payroll date, tax deposit date, customer collection date, lender reserve, or benefit invoice can change actual cash timing.
ROBS company cash is not personal runway
IRS describes the ROBS sequence as rollover assets moving into a qualified plan, followed by the plan purchasing stock of the new C corporation. Only after a valid stock purchase does the corporation receive cash it may be able to use for business operations. Plan assets are not the owner's personal runway, and the plan should not be treated as a payroll backstop.[1][2]
DOL fiduciary materials support a separate boundary for plan responsibilities. A company that sponsors a retirement plan still needs plan documents, fiduciary process, employee eligibility review, disclosures, and administration. This worksheet does not determine ERISA compliance, plan eligibility, fiduciary prudence, or whether plan-owned employer stock was purchased for adequate consideration.[5][6]
Use runway math as a planning worksheet
SBA startup-planning materials tell owners to separate one-time and monthly expenses and use projections when determining funding needs. That supports a cash worksheet, not a solvency opinion. The calculator does not decide whether the business is affordable, creditworthy, viable, properly capitalized, or eligible for financing.[7][8]
The most useful output is the fact pattern it exposes: how much owner employment cost consumes each month, how much other business burn remains, whether collected inflow covers costs, which reserve floor is breached, and how sensitive the result is to salary or benefit assumptions.
Owner salary and runway FAQ
Use these answers to keep salary, payroll, ROBS cash, and runway assumptions in separate review lanes before relying on the worksheet.
Sources and verification
- IRS ROBS compliance project
IRS describes ROBS as an arrangement where a plan uses rollover assets to purchase stock of a new C corporation, and identifies valuation, filing, prohibited-transaction, promoter-fee, employee-access, and business-failure concerns. Page last reviewed Nov. 16, 2025.
- IRS ROBS guidelines memorandum
The IRS memorandum describes the typical ROBS sequence and states ROBS arrangements are not noncompliant per se but should be reviewed case by case. Memorandum dated Oct. 1, 2008.
- IRS Publication 15
IRS Employer's Tax Guide supports the boundary that wages, withholding, deposits, and employer payroll taxes are payroll-administration questions, not outputs this calculator determines.
- IRS Paying yourself
IRS guidance states corporate officers are generally employees, wages paid to an officer should generally be commensurate with duties, and IRS may adjust corporation and shareholder returns if an officer is underpaid for services. It supports the limit that this worksheet is not a reasonable-compensation determination. Page last reviewed May 8, 2026.
- DOL ERISA fiduciary responsibilities
DOL explains fiduciary duties for retirement plans, including acting solely in participants' interest and following plan documents.
- DOL health plans and benefits
DOL materials support treating employee benefit obligations as separate compliance questions from a cash-runway worksheet.
- SBA calculate startup costs
SBA guidance tells business owners to calculate startup costs, separate one-time and monthly expenses, and estimate how much cash is needed before opening.
- SBA write your business plan
SBA business-plan guidance supports using financial projections and funding requests while not treating this calculator as a lender, solvency, or viability decision.
Use with adjacent planning tools
For operating cash-cycle inputs, use the working-capital calculator. For broader month-by-month operating cash flow, use the business runway calculator.