# Automation and AI ROI calculator Free, vendor-neutral automation and AI ROI calculator. Any pricing model, loaded labour cost, risk adjustment, NPV, IRR, discounted payback, scenarios and sensitivity, with the method and sources shown. URL: https://smallbaydigital.com/tools/roi-calculator/ Updated: 28 October 2026 Publisher: SBD (smallbaydigital.com). Free, runs in the browser, nothing entered is stored on a server. ## In short Automation ROI is net present value divided by discounted costs. Value hours removed at the loaded labour cost (wage plus about 43% for benefits in the US), count only the share of freed time that becomes money, add errors prevented, subtract every one-time and running cost, cut benefits for risk and discount the lot over three years at your cost of capital. ## How to use it 1. **Measure the process today.** Enter items handled a month, minutes per item, the hourly wage and the benefits load, and what errors cost. 2. **Estimate what changes.** Set the share of handling time removed, errors prevented, how much freed time becomes value, and months to adoption. 3. **Enter every cost.** Add one-time costs and running costs in any price model: flat plans, seats, usage per item, support and upkeep. 4. **Set finance and risk.** Choose the period, discount rate, benefit risk adjustment and cost contingency. 5. **Read the conservative case.** Check the conservative scenario and the sensitivity chart before deciding. Measure the inputs that move the answer most. ## Worked example A team handles 2,000 items a month at 6 minutes each, paid the US private-industry average of $32.36 an hour plus 43% for benefits. Automation removes 60% of the handling time and prevents half of 40 monthly errors costing $60 each, and 70% of the freed time turns into value. Against a $15,000 build, 80 hours of internal project time, $200 a month in subscriptions, $100 a month in support, $0.02 per item in usage and 20% upkeep, with a 10% risk cut, 10% contingency and a 10% discount rate over three years, the net present value is about $97,000, ROI 235% and payback seven months. The conservative case still returns about $39,000. ## Method - **Loaded rate:** `wage × (1 + load)`. What an hour costs the employer, not what the employee is paid. - **Monthly benefit:** `hours removed × loaded rate × realisation + errors prevented × cost per error + profit + avoided cost ÷ 12`. Ramps up linearly over the adoption months, then is cut by the benefit risk adjustment. - **Costs:** `one-time in month 0 + (seats + flat plans + usage × items + support + upkeep) each month`. Your own team’s project and training hours are costed at the loaded rate. Both carry the contingency. - **Present value:** `Σ cash flowₘ ÷ (1 + r)ᵐ, where r = (1 + annual rate)^(1/12) − 1`. A dollar in month 30 is worth less than a dollar today. - **ROI and NPV:** `NPV = PV benefits − PV costs; ROI = NPV ÷ PV costs`. The definitions used in published total economic impact studies. - **Payback and IRR:** `first month cumulative cash ≥ 0; IRR: rate where NPV = 0`. Payback shown plain and discounted. IRR is solved numerically and stated per year. ## Terms - **Net present value (NPV):** Discounted benefits minus discounted costs over the analysis period. Positive means the project earns more than your cost of capital. - **Return on investment (ROI):** Net present value divided by the present value of costs, the definition used in total economic impact studies. - **Internal rate of return (IRR):** The annual discount rate at which net present value is zero. - **Discounted payback:** The first month in which cumulative discounted cash flow turns positive. - **Loaded labour cost:** The hourly wage plus benefits, payroll taxes and leave. About 1.43 times the wage in US private industry. - **Realisation rate:** The share of freed time that turns into money: hires not made, overtime cut or work that earns. - **Risk adjustment:** A percentage cut to benefits, and a contingency added to costs, for uncertainty in the estimates. - **Discount rate:** Your cost of capital. Converts future cash into today’s money. ## Sources - Forrester, [Total Economic Impact methodology](https://www.forrester.com/policies/tei/). Weighs benefits, costs, flexibility and risk. Published studies are risk-adjusted and discounted, most often over three years at 10%. Used for: Model structure, 3-year period, 10% discount rate, risk adjustment. - US BLS, [Employer Costs for Employee Compensation, Dec 2025](https://www.bls.gov/news.release/ecec.htm). Private industry: $46.15 an hour in total, of which wages $32.36 (70.1%) and benefits $13.79 (29.9%). Used for: Hourly wage $32.36 and the 43% load. - McKinsey Global Institute, [Generative AI and the future of work in America, 2023](https://www.mckinsey.com/mgi/our-research/generative-ai-and-the-future-of-work-in-america). About 30% of US work hours could be automated by 2030. Whole jobs rarely clear that bar; single tasks often do. Used for: The warning above 85% of time removed. - Practitioner benchmarks, Maintenance planning figures. Published planning figures run from 15 to 22% of build cost a year for stable automation, and 30 to 40% where APIs or prompts change often. No audited benchmark exists. Used for: Upkeep at 20% of build a year. - Finance practice, Hard and soft savings. Freed time is not cash unless hiring, overtime or temp spend falls, or the time moves to work that earns. Finance teams commonly count 60 to 80%. Used for: Realisation at 70%. ## FAQ ### How do you calculate the ROI of automation or AI? Add up the benefits (hours removed at the loaded hourly cost, errors prevented and any measured profit or avoided cost) and the costs (one-time build, internal time, training, subscriptions, seats, usage and upkeep) over the analysis period. Discount both to today, apply a risk cut to the benefits and a contingency to the costs, then divide net present value by discounted costs. ### What is a loaded hourly cost? The wage plus everything the employer pays on top: benefits, payroll taxes, paid leave and insurance. In US private industry benefits were 29.9% of total compensation in December 2025, according to the Bureau of Labor Statistics, which is about 43% on top of the hourly wage. ### Should time saved count as money saved? Only partly, unless it changes spending. If no one is hired, overtime does not fall and the freed hours do not go to work that earns, the saving does not reach the accounts. Most finance teams count 60 to 80% of freed time. Set it to 100% only when a cost actually disappears. ### What discount rate and period should a business case use? Use your cost of capital if you know it. Published total economic impact studies mostly use three years at 10% a year. Use a shorter period for fast-changing AI tools, and a longer one only if the system will run unchanged. ### How should usage-based AI pricing be included? Multiply the cost per automated item (model tokens, API calls, OCR pages, task or operation fees) by the number of items the automation handles each month. Check the provider’s current price list, and add headroom for retries and longer inputs. ### What is a good payback period? It depends on your cost of capital and risk appetite, which is why this tool shows discounted payback, net present value and IRR rather than a single verdict. As a check, compare the conservative scenario with the return you would accept on any other investment of the same size.