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Methodology

Contract Gap Cost methodology

Estimate the economic burden of a user-entered gap between contracts.
Duc Nguyen X.By Duc Nguyen X.· Founder, Wage101Last reviewed: View update historyMethodology

Educational only: Work and pay decision support, not tax, legal, financial or career advice.

Privacy: Calculations run locally; Wage101 does not receive your work or pay inputs.

Update policy: Reviewed when formulas or official dependencies change.

Scope: Market-neutral work and pay planning using your own assumptions.

1. Formulas and units

Net contract-gap burden
gapBurden = baselineWeeklyNet × gapWeeks + incrementalWeeklyCosts × gapWeeks − replacementIncome

Where

baselineWeeklyNet
Baseline weekly net earnings (currency units/week)Source: User assumption
gapWeeks
Gap weeks (weeks)Source: User assumption
incrementalWeeklyCosts
Incremental weekly costs (currency units/week)Source: User assumption
replacementIncome
Replacement income (currency units)Source: User assumption
gapBurden
Net contract-gap burden (currency units)Source: Calculated output
Lost net earnings
lostNetEarnings = baselineWeeklyNet × gapWeeks

Where

baselineWeeklyNet
Baseline weekly net earnings (currency units/week)Source: User assumption
gapWeeks
Gap weeks (weeks)Source: User assumption
lostNetEarnings
Lost net earnings (currency units)Source: Calculated output
Incremental gap costs
incrementalCosts = incrementalWeeklyCosts × gapWeeks

Where

gapWeeks
Gap weeks (weeks)Source: User assumption
incrementalWeeklyCosts
Incremental weekly costs (currency units/week)Source: User assumption
incrementalCosts
Incremental gap costs (currency units)Source: Calculated output

Money inputs and outputs use the currency selected in the scenario without changing the canonical methodology. Pay, time, benefits and work-related costs use the units stated beside each input.

2. Worked example

Input assumptions

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

Calculation and outputs

Example

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

Net contract-gap burden
12,000.00 currency units
Lost net earnings
12,000.00 currency units
Incremental gap costs
3,000.00 currency units

The engine returns a 12,000 net gap burden.

Interpretation

Use the burden as a planning scenario for the entered gap length.

3. Validation and boundary checks

  • 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.

4. Assumptions and source classification

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

This calculator has no current policy-data dependency. Its work and pay assumptions are user supplied. Registered family-level regression suites exercise the shared work-logic engine and worked-result reconciliation.

5. Limitations

  • This is not an unemployment-benefit calculator.
  • Tax, probability and timing within weeks are excluded.

This is educational decision support, not personalised tax, legal, financial or career advice. Check the treatment of your circumstances under the rules that apply to you and seek qualified advice where appropriate.

6. Update and evidence policy

Registered family-level suites test formula invariants and example reconciliation; the release ledger records that coverage without claiming a separate oracle for every line of public copy. There is no official threshold or benchmark to refresh for this calculator. Work and pay inputs remain user-supplied because they vary by person, job and contract.

Change history

  1. : Initial public release of the Contract Gap Cost planner and methodology.

Related reading

Use these practical guides to interpret the decision and its assumptions.

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