AI ROI Calculator: Justifying the "Copilot Tax" to Your CFO
Your CFO sees a $39/month line item. You see a 20% jump in velocity. The problem is, "Velocity" doesn't show up on a Balance Sheet. "Dollar Savings" do.
To get budget approval for tools like GitHub Copilot or Cursor Enterprise, you need to speak the language of finance. You need to prove that the "Copilot Tax" is actually a "Velocity Dividend."
Use the framework below to calculate the break-even point and the net annual savings per developer.
1. The "Break-Even" Formula
Before promising massive gains, start with the minimum viable argument. How many minutes does Copilot need to save to pay for itself?
| Metric | Value | Notes |
|---|---|---|
| Dev Annual Cost | $150,000 | Fully loaded (Salary + Benefits). |
| Hourly Cost | $75/hr | Assuming 2,000 working hours/year. |
| Tool Cost | $39/month | GitHub Copilot Enterprise price. |
| Break-Even Point | 31 Minutes | You only need to save 31 mins per month to cover the cost. |
Conclusion: If AI saves your developer just 1.5 minutes per day, it is free.
2. The "Efficiency Gain" Model
Now, let's look at the upside. If we assume a conservative 10% efficiency gain on coding tasks (which make up ~40% of a dev's week), the math becomes compelling.
- Coding Hours / Week: 16 hours (40% of 40h week).
- Efficiency Gain: 15% (Conservative estimate).
- Hours Saved / Week: 2.4 hours.
- Value of Time Saved: $180 / week ($75 x 2.4).
- Net Annual Savings: ~$9,000 per developer.
3. Frequently Asked Questions (FAQ)
A: GitHub's own research suggests up to 55% faster coding for specific tasks[cite: 103], but for a realistic business case, we recommend using a conservative 15-20% efficiency gain across the full SDLC.
A: Calculate the Cost of Fixing a Bug. If AI helps catch 5 bugs per month during the coding phase (instead of QA), and each QA bug costs $200 to fix, you save $1,000/month in "Avoided Costs."
A: No. The ROI comes from "Velocity," not "Headcount Reduction." You get 20% more features shipped for the same salary cost, reducing the need to hire additional contractors.
