Owner Earnings / Add-Back Calculator (SDE and EBITDA)
Before anyone talks about what your business is worth, you need a clean earnings number. This tool builds normalized SDE and EBITDA from your net profit and add-backs, and itemizes each one so you can see what drove the figure. It feeds directly into a valuation conversation. Nothing you enter is stored.
Last updated August 30, 2026
How it works
Reported net profit understates what a business really earns for an owner, because it is reduced by things a new owner would not carry, or by non-cash charges. EBITDA adds back interest, taxes, depreciation and amortization, plus genuine one-time items. SDE goes one step further and adds back the owner's salary, benefits and personal expenses run through the business, because those are discretionary to the owner. Small owner-operated businesses are usually valued on SDE; larger ones on EBITDA.
A worked example
Take a business with $200,000 of net profit. Add back $30,000 of interest, $40,000 of taxes, $25,000 of depreciation, $5,000 of amortization and $15,000 of one-time costs, and normalized EBITDA is $315,000. Add the owner's $150,000 salary, $20,000 of benefits and $10,000 of personal expenses, and SDE is $495,000. The same business is a $315,000 EBITDA business to one buyer and a $495,000 SDE business to another, which is why the definition has to be stated.
Add-backs get challenged
Every add-back is a claim, and buyers challenge them in diligence. An add-back you can document with clean records will usually stand. One you cannot, or one that is really an ongoing cost of running the business, rarely survives. Be conservative. An inflated earnings number does not raise the price; it raises the odds the deal falls apart when the number does not hold up.
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Frequently asked questions
What is the difference between SDE and EBITDA?
EBITDA adds back interest, taxes, depreciation and amortization to net profit. SDE adds all of that plus the owner's salary, benefits and personal expenses. SDE is used for owner-operated businesses, EBITDA for larger ones run by management.
What counts as a legitimate add-back?
A cost that a new owner would not incur, or a non-recurring or non-cash charge: the current owner's above-market pay, genuine one-time expenses, personal costs run through the business. Ongoing costs of operating the business are not add-backs.
Why do buyers push back on add-backs?
Because each one raises the earnings the price is based on. Buyers only pay for earnings they believe will continue, so they test every add-back in diligence and discard the ones that are not documented.
Is my data stored?
No. The calculation runs entirely in your browser. Nothing you enter is saved or sent anywhere.