# Calculate the Time Tax on every recurring process: the WIRE costing build Source: https://getstartedwithai.net/tutorials/wire-method-time-tax-calculator Site: Get Started With AI Tagline: Build AI automations that actually run your business. Audience: solo professionals, freelancers, consultants and AI implementers in training Contact: hello@getstartedwithai.co.uk This Markdown companion is generated from the prerendered page for AI crawlers. # Calculate the Time Tax on every recurring process: the WIRE costing build A consultancy partner once told me their Friday status reports were "a bit of a faff". When we ran the Time Tax, the bit-of-a-faff turned out to be £24,000 a year of senior time. That figure changed which automation got built and unlocked the £600 spend that paid back in three weeks. Time Tax is the second step of the WIRE Method audit. The formula is hours per week times hourly rate times 52, plus the opportunity cost of the human hours not freed for higher-value work. Run it on every candidate from the Monday Morning Test and you will know which one ships first. ## What you need - Your candidate list from the Monday Morning Test, with rough hours per week. - The loaded hourly cost of the people who do each task. Loaded means salary divided by 1,800 working hours plus a 30 percent uplift for NI, pension and overhead. - A Google Sheet or Excel file with one row per candidate. Six columns: name, hours per week, loaded hourly cost, annual £, opportunity cost, total Time Tax. - 30 minutes uninterrupted to run the calculation across 5 to 10 candidates. ## The formula in plain English Time Tax has two parts. The direct cost is the hours-times-rate-times-52 calculation. The opportunity cost is what those hours could earn if redirected to billable or growth work. Add them together for the total annual cost of leaving the loop manual. - Direct cost: hours per week x loaded hourly cost x 52 weeks. - Opportunity cost: hours per week x billable rate (or marginal revenue per hour) x 52 weeks. Apply only to people whose freed time can realistically be sold or redirected. - Total Time Tax: direct cost plus opportunity cost. For most candidates the figure is two to four times what the partner expected. ## Step 1: Set up the sheet (5 minutes) 1. Open a fresh Google Sheet. Name it Time Tax Calculator [date]. 2. Header row: Candidate, Hours/week, Owner, Loaded £/hr, Direct annual £, Billable £/hr, Opportunity annual £, Total Time Tax, Rank. 3. Freeze the header row. Format the £ columns as currency with no decimals. The output is a £ figure, not a spreadsheet exam. 4. Paste the candidate list from the Monday Morning Test into the first column. The sheet is now ready. ## Step 2: Fill in the loaded hourly cost (10 minutes) For each candidate, the loaded hourly cost is what the business pays per hour of that person's time including overhead. Get this right and the figure defends itself. - A £45,000 salaried bookkeeper costs about £32 per hour loaded. £45,000 divided by 1,800 hours plus 30 percent. - A £75,000 senior accountant costs about £54 per hour loaded. - A £120,000 partner costs about £87 per hour loaded. - A £18 an hour VA on a contract costs £18 loaded; the overhead is already in the rate. - For shared candidates, weight the rate by who does what proportion. A Friday report drafted by an admin and reviewed by a partner uses both rates. ## Step 3: Calculate direct and opportunity costs (10 minutes) The sheet does the maths. You set the formula once and paste it down. 1. In the Direct annual £ column, formula: hours/week x loaded £/hr x 52. 2. In the Billable £/hr column, enter the rate the same person could be billed at if their time was redirected. For partners this is the partner billing rate. For non-billable staff, enter zero. 3. In the Opportunity annual £ column, formula: hours/week x billable £/hr x 52. 4. In the Total Time Tax column, formula: direct annual £ plus opportunity annual £. 5. In the Rank column, sort the sheet descending by Total Time Tax. The top three are your shortlist for the next WIRE step. ## Step 4: Sense-check the figures (5 minutes) A Time Tax above £20,000 a year on a single loop is common. A Time Tax above £80,000 on a single loop usually means the hours estimate or the rate is wrong; double-check before the figure goes to a board meeting. - Are the hours weekly or monthly? Confusing the two is the most common error and produces a 4x overstatement. - Is the loaded rate the right rate for the person, not the partner? The partner reviews; the bookkeeper does the work. - Is the opportunity cost real? Freed time on a fully booked partner is real. Freed time on a junior with no demand to fill it is zero. ## Step 5: Present the figure (5 minutes) A Time Tax sheet works in a board meeting because the £ figure is not a guess. Read the top three lines, name the people, name the loops, and the conversation about budget for tooling becomes a 5-minute conversation. ## What you ship A ranked list of automation candidates with a real annual £ figure against each. The top three by Time Tax are the shortlist that goes into the Fastest Win selection rule. Most first-pass calculations land at £40,000 to £120,000 of annual Time Tax across the candidate list. That figure pays for the build budget several times over. ## What to build next Take the top three by Time Tax into the wire-method-fastest-win-rule tutorial. The Fastest Win rule picks the right first build out of the top three, and it is rarely the candidate with the biggest number. ## Common mistakes - Using the cheap rate instead of the loaded rate. £18 looks honest; £32 loaded is what the business actually pays. Use the loaded figure. - Skipping the opportunity cost on partner time. Partners on a billable hour have an opportunity cost equal to the partner billing rate; ignoring it understates the Time Tax by half. - Including one-off projects on the list. The Time Tax assumes a 52-week recurrence. One-offs are not candidates at this stage. - Letting the partner override the figure based on gut feel. The figure beats the gut feel because the figure can be defended at a budget review and the gut feel cannot. ## Related builds More tutorials in WIRE Method. Each one runs in 60 to 90 minutes and ships a finished asset. ### The Monday Morning Test: find the work waiting to be automated in 15 minutes 30 to 60 minutes. Beginner + Solo Pro. [Open tutorial](/tutorials/wire-method-monday-morning-test) ### Pick the right first automation: the WIRE Method Fastest Win selection rule 30 to 60 minutes. Solo Pro / Implementer. [Open tutorial](/tutorials/wire-method-fastest-win-rule) ### Ship the Minimum Viable Automation: the WIRE Method first-build pattern 30 to 60 minutes. Solo Pro / Implementer. [Open tutorial](/tutorials/wire-method-minimum-viable-automation) ### Run the Bus Test before signing off: the WIRE Method handover protocol 30 to 60 minutes. Implementer. [Open tutorial](/tutorials/wire-method-bus-test-handover) ## Questions people ask before they start ### Why include opportunity cost? Isnt direct cost enough? Direct cost defends the spend at a budget review. Opportunity cost defends the priority. A loop with low direct cost but high opportunity cost (typically partner-level review work) ranks higher in the build queue because the freed hour is worth more than the saved hour. ### What if I dont know the loaded hourly cost? Approximate it. Take the salary, divide by 1,800 hours, multiply by 1.3 for overhead. The figure is within 10 percent of the real number for any UK SMB salaried role. For contractors and VAs use the contract rate as is. ### Does the calculation work for a one-person business? Yes, with a tweak. Use your billable rate as both the loaded rate and the opportunity rate. The Time Tax then represents the revenue you forgo by doing the manual work yourself. Numbers come out higher than people expect. ### How does Time Tax fit alongside ROI on the build cost? Time Tax is the annual cost of the manual loop. ROI on the build is the build cost divided by the monthly Time Tax saving. Most SMB builds pay back in 2 to 6 months by this calculation. Anything longer than 12 months goes back to scoping. ### Can I do this on a sheet other than Google Sheets? Yes, Excel and Numbers work the same way. The calculation is six columns and three formulas. The tool does not matter; the discipline of running the calculation does.