Payroll cover calculator

This method estimates the key person's contribution to the company's profits by dividing the key person's salary by the company's total wage bill and then multiplying that by the company's gross profit level. This method may not be suitable for a new or unprofitable company, or if the shareholder is taking a low salary, perhaps because they're receiving amounts by way of dividend.

These are only guidelines. Underwriters usually want to establish that the cover is reasonable, so it's about building the case and justifying the level of cover.