Free calculator

SDE calculator (seller’s discretionary earnings)

Add back the right costs, avoid the ones buyers reject, and see what your SDE means for your business value.

Last 12 months

One working owner only.
Personal car, phone, travel.
A redesign, a legal settlement.
Seller’s discretionary earnings (SDE)
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Total add-backs
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Typical value range at market multiples
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    Estimate only, based on the numbers you enter. Not an appraisal.

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    Usually valid add-backs

    • One working owner’s salary or draws
    • Owner perks run through the business
    • Interest
    • Income taxes
    • Depreciation and amortization
    • Genuine one-off costs (with receipts)

    Not add-backs

    • Ongoing content or development
    • Normal support or contractors
    • Hosting and software
    • Normal ad spend
    • Expected refunds and chargebacks
    • A second owner’s salary

    What is seller’s discretionary earnings?

    SDE is the total financial benefit one full-time owner gets from a business: net profit plus that owner’s pay, plus discretionary and non-recurring expenses, interest, taxes and depreciation. It is the standard earnings figure for valuing small owner-operated online businesses. Larger, management-run companies use adjusted EBITDA instead.

    SDE multiple: value ÷ SDE. Most small online businesses trade around 2x–3.5x annual SDE; see multiples by model.

    Questions, answered

    Frequently asked questions

    What is the SDE formula?

    SDE = net profit + one owner’s salary and perks + interest + income taxes + depreciation and amortization + genuine one-off expenses.

    What is the difference between SDE and EBITDA?

    EBITDA assumes a paid manager is running the business, so it does not add back owner pay. SDE adds back one owner’s pay and suits smaller, owner-run businesses.

    What is a good SDE multiple?

    For small online businesses, roughly 2x to 3.5x annual SDE is typical. Strong, diversified, low-effort businesses reach higher; declining or owner-dependent ones lower.

    Can I add back my contractors?

    No. If the business needs the work done after the sale, it is an operating cost, not an add-back.

    Do buyers verify add-backs?

    Yes. Every add-back needs an explanation and a document behind it. Unsupported add-backs are the fastest way to lose a buyer’s trust.

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