Skip to main content

Market-neutral work and pay guide

How to use the Contract Gap Cost calculator

Estimate lost net earnings and incremental costs after user-entered replacement income.

Build the gap burden on one horizon

Contract-gap components
ComponentFormulaCheck
Lost net earningsBaseline weekly net × gap weeksUse one consistent net basis
Incremental costsExtra weekly costs × gap weeksInclude only gap-caused costs
Gross burdenLost earnings + incremental costsBefore offsets
Replacement incomeEntered same-horizon incomeDo not annualise mismatched income
Net burdenGross burden − replacement incomePlanning scenario

Worked example: a six-week contract gap

calculator fixture in generic currency units
MeasureCalculationResult
Lost earnings2,000 × 612,000
Incremental costs500 × 63,000
Gross burden12,000 + 3,00015,000
Replacement incomeEntered amount3,000
Net gap burden15,000 − 3,00012,000

Burden and immediate cash need can differ

The calculator totals the entered horizon. It does not model invoice dates, savings access or the timing of replacement income, so cash-flow planning remains a separate step.

Keep bases and offsets consistent

  • Use baseline earnings and replacement income on the same horizon.
  • Avoid counting ordinary costs as incremental gap costs.
  • Map payment timing separately from total burden.
  • Verify tax and any unemployment support outside this model.

How the Contract Gap Cost calculation works

Net contract-gap burden

gapBurden = baselineWeeklyNet × gapWeeks + incrementalWeeklyCosts × gapWeeks − replacementIncome

gapBurden
Net contract-gap burden
baselineWeeklyNet
Baseline weekly net earnings
gapWeeks
Gap weeks
incrementalWeeklyCosts
Incremental weekly costs
replacementIncome
Replacement income

The calculator and article use this relationship consistently; the article does not reimplement the calculation.

Lost net earnings

lostNetEarnings = baselineWeeklyNet × gapWeeks

lostNetEarnings
Lost net earnings
baselineWeeklyNet
Baseline weekly net earnings
gapWeeks
Gap weeks
incrementalWeeklyCosts
Incremental weekly costs
replacementIncome
Replacement income

The calculator and article use this relationship consistently; the article does not reimplement the calculation.

Incremental gap costs

incrementalCosts = incrementalWeeklyCosts × gapWeeks

incrementalCosts
Incremental gap costs
baselineWeeklyNet
Baseline weekly net earnings
gapWeeks
Gap weeks
incrementalWeeklyCosts
Incremental weekly costs
replacementIncome
Replacement income

The calculator and article use this relationship consistently; the article does not reimplement the calculation.

2,000 weekly net over six weeks, 500 weekly extra costs and 3,000 replacement income.

Inputs used in the Contract Gap Cost worked example

Normalized calculator inputs
InputEntered valueWhat it representsSource class
Baseline weekly net earnings2,000 currency units/weekWeekly net earnings that would otherwise be received.user assumption
Gap weeks6 weeksLength of the contract gap.user assumption
Incremental weekly costs500 currency units/weekExtra weekly costs during the gap.user assumption
Replacement income3,000 currency unitsIncome that offsets the total gap burden.user assumption
Replace these example values with records or assumptions from the decision you are evaluating.

Worked example: Contract Gap Cost

The calculator normalizes the inputs above, applies Net contract-gap burden, and returns the outputs below. The displayed result is therefore reproducible in the linked calculator.

Calculator-derived default-scenario outputs
MeasureResultInterpretation
Net contract-gap burden12,000 currency unitsLost net earnings plus incremental costs minus replacement income.
Lost net earnings12,000 currency unitsBaseline weekly net earnings multiplied by gap weeks.
Incremental gap costs3,000 currency unitsIncremental weekly costs multiplied by gap weeks.

Interpret the result and test Gap weeks

  • Net contract-gap burden: 12,000 currency units. Lost net earnings plus incremental costs minus replacement income.
  • Lost net earnings: 12,000 currency units. Baseline weekly net earnings multiplied by gap weeks.
  • Incremental gap costs: 3,000 currency units. Incremental weekly costs multiplied by gap weeks.
One-input sensitivity: Gap weeks
ResultBaselineChanged-input scenarioHow to read it
Net contract-gap burden12,000 currency units14,500 currency unitsLost net earnings plus incremental costs minus replacement income.
Lost net earnings12,000 currency units14,000 currency unitsBaseline weekly net earnings multiplied by gap weeks.
Incremental gap costs3,000 currency units3,500 currency unitsIncremental weekly costs multiplied by gap weeks.
Only Gap weeks changes: 6 weeks to 7 weeks. All other normalized inputs stay fixed.

Checks that are specific to Contract Gap Cost

  • The worked example is calculated through the same shared-work-logic engine as the planner.
  • Non-finite and out-of-range assumptions return an input error.
  • Result cards, trace, CSV, PDF and methodology bind to named engine result fields.

What this Contract Gap Cost guide includes and excludes

  • Baseline earnings and gap length are entered by the user.
  • Replacement income directly offsets the gap burden.

Sources and method boundary

Change history

  1. July 28, 2026Published How to use the Contract Gap Cost calculator.