Payroll Run Rate

Monthly fully-loaded payroll cost as a percentage of `finance.gross_burn_rate`. Tells the board what share of cash outflow funds people vs everything else (infra, GTM spend, professional services, facilities). Common pitfall: comparing this ratio across companies without normalizing for stage and capex intensity — a pure-software seed company will run very payroll-heavy; a hardware-or-bio company will not. Best practice is to read this in conjunction with the burn-rate trend, not in isolation.

Derived triple — effective FTE, cost-per-FTE, and annualized payroll — computed from `hr.payroll_run_rate` + `hr.total_contractors` and a contractor-to-FTE conversion factor. Lets the board see capacity in normalized terms even when the staffing mix shifts. Common pitfall: choosing a contractor-to-FTE factor without explicit board agreement — some companies use 1.0 (1 contractor = 1 FTE for capacity), others use 0.8 (account for ramp / partial-engagement), others use cost-equivalent ratios. Lock the convention.

Total number of employees (W-2 / direct-employment equivalents) across all departments at period end. The base denominator for nearly every other HR ratio — turnover rate, revenue per FTE, payroll as % of burn — so getting the snapshot date and the FTE-vs-headcount convention right matters. Common pitfall: mixing headcount (people) with FTE (capacity) — they diverge whenever part-time, contractor, or shared-services arrangements exist. Document the convention (typically "FTE-equivalent, employees only, end-of-period") at the board level once and apply consistently.

Annual Recurring Revenue divided by total FTE-equivalent workforce — the canonical SaaS workforce-productivity ratio anchored to the SaaS Capital Annual Survey methodology (revenue per employee benchmarks). A high-signal denominator for "are we over- or under-staffed for our revenue scale?" Common pitfall: choosing different ARR conventions (ending vs average, GAAP-reconciled vs raw) without locking in a board-level standard. Best practice is to pair this with `sales.arr` so the numerator is unambiguous and to disclose whether contractors are included in the FTE denominator.

Average monthly cash outflow before any inflows are netted off — essentially the company's monthly cost base in cash terms. Tracked alongside net burn because net burn alone can mask a structural problem when revenue is masking high cost. The board reads gross burn to understand the absolute cost commitment (mostly payroll, infra, COGS, sales spend) regardless of revenue mix. Common pitfall: founders often optimize the net burn narrative ("we cut burn 30%") via a one-time inflow without addressing the gross-burn cost base — the next quarter without that inflow re-exposes the underlying spend. Always present gross and net side-by-side.