Revenue per employee is annual sales divided by headcount. The Census Bureau’s Statistics of U.S. Businesses publishes receipts and employment for employer firms, so the same quotient is receipts divided by employment. The SEC’s beginners’ guide is where that receipt line sits on an income statement: sales at the top.
The revenue per employee calculator is the quotient, plus payroll on the same headcount:
Revenue per employee = annual revenue ÷ employees
Payroll per employee = annual payroll ÷ employees
Payroll share = payroll ÷ revenue
This is an average. One person who sells and seven who support the work will not each produce the headline figure. Contractors are outside a Census employment count unless you add them. The loaded cost of one hire is the employee true cost calculator. Salary plus the employer charges and benefits you type is the employer payroll cost calculator. An hour of that pay, times the people in the room, is the meeting cost calculator and the meeting cost post.
Use one period, usually a year. A part-time person can be a fraction. These examples are the division. They are not a hiring plan, and they are not a Census benchmark for your trade. SUSB tables are the public source when you want a published receipts-and-employment pair. This page uses the numbers you type.
Fig 1
Revenue split by headcount
Payroll uses the same people
Divide annual revenue by employees. Divide payroll by the same count, and divide payroll by revenue for the share.
Example 1. Eight people, $1,200,000
The calculator’s published year.
- Annual revenue: $1,200,000
- Employees: 8
- Annual payroll: $480,000
Revenue per employee = 1,200,000 ÷ 8 = $150,000.00.
Payroll per employee = 480,000 ÷ 8 = $60,000.00.
Payroll share = 480,000 ÷ 1,200,000 = 40%.
The other 60% of revenue is 1,200,000 - 480,000 = $720,000.00. That leftover still has to cover rent, materials, tax, and anything else that is not in the payroll box. Payroll share is not operating margin. Operating margin also subtracts cost of goods sold and the rest of overhead, which the operating margin post walks.
Calculator result
Revenue per employee
- Annual revenue
- $1,200,000.00
- Employees
- 8 people
- Annual payroll
- $480,000.00
$150,000.00
revenue per employee
- Payroll per employee
- $60,000.00
- Payroll share of revenue
- 40%
- Employees
- 8
Fig 2 · 1/2
The $1,200,000 year
Payroll $480,000 on eight people
Payroll
$480,000
Rest of revenue
$720,000
Payroll is $480,000, which is 40% of revenue.
The other $720,000 is everything that is not in the payroll box.
Example 2. What if you hire two more people?
Revenue stays $1,200,000. Headcount goes from 8 to 10. The two new people are paid like the others, $60,000 each, so payroll goes from $480,000 to $600,000.
Revenue per employee = 1,200,000 ÷ 10 = $120,000.00.
Payroll per employee = 600,000 ÷ 10 = $60,000.00.
Payroll share = 600,000 ÷ 1,200,000 = 50%.
Each person still costs $60,000 of payroll. Sales per person fell by $30,000, from $150,000 to $120,000, because the same revenue is split ten ways. The share rose from 40% to 50% because payroll rose and revenue did not.
If the two hires are the reason next year’s revenue grows, this row will not show it. The formula has one revenue number.
Example 3. What if revenue grows 20% and the team does not?
Headcount stays 8. Payroll stays $480,000. Revenue = 1,200,000 × 1.20 = $1,440,000.
Revenue per employee = 1,440,000 ÷ 8 = $180,000.00.
Payroll per employee stays $60,000.00.
Payroll share = 480,000 ÷ 1,440,000 = 33.3%.
The 20% revenue gain is a 20% gain in the per-person figure: 150,000 × 1.20 = 180,000. The payroll share does not fall by 20% of 40%. It falls to 33.3%, because the denominator grew and the payroll numerator did not. 40% - 33.3% = 6.7 percentage points on the printed figures.
Example 4. A team counted as 6.5
- Revenue: $780,000
- Employees: 6.5
- Payroll: $260,000
Revenue per employee = 780,000 ÷ 6.5 = $120,000.00.
Payroll per employee = 260,000 ÷ 6.5 = $40,000.00.
Payroll share = 260,000 ÷ 780,000 = 33.3%.
The half person is in the count on purpose. Round 6.5 up to 7 and revenue per employee becomes 780,000 ÷ 7 = $111,428.57. That is $8,571.43 below the $120,000.00 figure. Payroll on the same $260,000 becomes $37,142.86 per person, and the share stays 33.3%. Use the fraction if that is how you count the team.
Example 5. One person, and a draw that is not in payroll
- Revenue: $180,000
- Employees: 1
- Payroll: $0
Revenue per employee = $180,000.00.
Payroll per employee = $0.00.
Payroll share = 0%.
The draw never entered the payroll box, so the share says wages take none of the revenue. Put a $72,000 draw into payroll:
Revenue per employee stays $180,000.00.
Payroll per employee = $72,000.00.
Payroll share = 72,000 ÷ 180,000 = 40%.
Same sales per person. The share goes from 0% to 40% because you decided the draw belongs in the payroll line. Census employment for an employer firm is people on the payroll. An owner draw is a separate choice on this page.
Example 6. Contractors left out of the count
Example 1’s eight employees produce $150,000.00 each on $1,200,000. Four contractors do a large share of the delivery and are not in the eight.
Add them to the headcount. Employees = 12. Leave payroll at $480,000 if the contractors are paid outside that box, which is a different decision from adding them to headcount. The page will still divide.
Revenue per employee = 1,200,000 ÷ 12 = $100,000.00.
Payroll per employee = 480,000 ÷ 12 = $40,000.00.
Payroll share stays 40%, because neither revenue nor payroll changed.
The eight-person reading was $50,000 higher per person: 150,000 - 100,000 = $50,000. That gap is the contractors’ absence from the denominator, not extra sales. If you also move contractor pay into the payroll box, the share rises and the $40,000 payroll-per-person figure moves with it. Type the pay you want in the average.
Fig 3 · 1/5
Revenue per person
Each bar is that row's revenue divided by its headcount
- Revenue per employee
| Category | Revenue per employee |
|---|---|
| Cafe | $40k |
| 10 people | $120k |
| 8 people | $150k |
| Studio | $160k |
| Revenue +20% | $180k |
The cafe is $40,000. Ten people on the $1,200,000 year is $120,000.
Eight people is $150,000. The studio is $160,000. A 20% revenue gain is $180,000.
Example 7. Same revenue, two headcounts
A sixteen-person shop:
- Revenue $640,000
- Employees 16
- Payroll $320,000
Revenue per employee = 640,000 ÷ 16 = $40,000.00.
Payroll per employee = 320,000 ÷ 16 = $20,000.00.
Payroll share = 50%.
A four-person shop on the same revenue:
- Revenue $640,000
- Employees 4
- Payroll $280,000
Revenue per employee = 640,000 ÷ 4 = $160,000.00.
Payroll per employee = 280,000 ÷ 4 = $70,000.00.
Payroll share = 280,000 ÷ 640,000 = 43.8%.
Sales per person are four times higher in the smaller shop: 160,000 ÷ 40,000 = 4. Payroll share is only a few points lower, 50% against 43.8%. The smaller team is paid more per person, $70,000 against $20,000, so the share does not fall in line with the headcount.
Fig 4 · 1/2
Payroll and the rest of revenue
Each column is that shop's annual revenue
- Payroll
- Rest of revenue
| Category | Payroll | Rest of revenue |
|---|---|---|
| 16 people | $320k | $320k |
| 8 people | $480k | $720k |
| 4 people | $280k | $360k |
Payroll is $320,000, $480,000, and $280,000.
The rest of revenue is $320,000, $720,000, and $360,000.
The sixteen-person column and the four-person column are the same height, $640,000. The payroll slice is a bit thicker on the sixteen-person shop. The eight-person column is the $1,200,000 year from example 1.
Example 8. A month typed in as the year
The eight-person shop bills $100,000 in a month, and monthly payroll is $40,000. Those are example 1’s figures divided by 12: 1,200,000 ÷ 12 = 100,000, and 480,000 ÷ 12 = 40,000.
Type the month into the annual boxes:
Revenue per employee = 100,000 ÷ 8 = $12,500.00.
Payroll per employee = 40,000 ÷ 8 = $5,000.00.
Payroll share = 40%.
The share matches the year. The per-person sales figure does not. Set $12,500 next to a $60,000 salary and the shop looks like it cannot cover wages. The year is 12,500 × 12 = $150,000 of revenue per person, which is example 1. The page does not annualize. If the label says annual revenue, the input has to be the year, or you read the result as a month and keep every comparison on that month.
Fig 5 · 1/5
Per person as the year fills in
Eight people. Each step adds one month of the $100,000 run-rate.
Revenue per employee
- Revenue per employee
| Point | Revenue per employee |
|---|---|
| 1 mo | $13k |
| 3 mo | $38k |
| 6 mo | $75k |
| 9 mo | $113k |
| 12 mo | $150k |
After one month the figure is $12,500.
After six months it is $75,000. The full year is $150,000.
Payroll scaled the same way keeps the share at 40%. Three months of revenue is $300,000 and the result is $37,500.00. Six months is $600,000 and $75,000.00. Nine months is $900,000 and $112,500.00.
A year with no revenue and the payroll still on the books: revenue $0, 8 employees, payroll $480,000. Revenue per employee = $0.00. Payroll per employee = $60,000.00. Payroll share prints Need revenue, because the share divides by revenue.
Example 9. Loaded cost against the $150,000
Revenue per employee does not price a hire. The true-cost page does, for one person.
The published inputs:
- Salary $90,000
- Payroll taxes and benefits 24%
- Equipment and software $6,500
- Workspace and overhead $12,000
- Annualized hiring cost $5,000
Taxes and benefits = 90,000 × 0.24 = $21,600.
Total = 90,000 + 21,600 + 6,500 + 12,000 + 5,000 = $135,100.00.
Per month = 135,100 ÷ 12 = $11,258.33.
Cost above salary = 135,100 - 90,000 = $45,100.00.
Loaded multiplier = 135,100 ÷ 90,000 = 1.5×.
Calculator result
Employee true cost
- Annual salary
- $90,000.00
- Payroll taxes & benefits
- 24%
- Equipment & software
- $6,500.00
- Workspace & overhead
- $12,000.00
- Annualized hiring cost
- $5,000.00
$135,100.00
annual employee cost
- Per month
- $11,258.33
- Cost above salary
- $45,100.00
- Loaded salary multiplier
- 1.5×
Fig 6 · 1/5
The $135,100 loaded cost
Published true-cost inputs on a $90,000 salary
Annual cost
Salary
$90,000
Taxes and benefits
$21,600
Equipment
$6,500
Workspace
$12,000
Hiring
$5,000
Salary is $90,000. Payroll taxes and benefits are $21,600.
Equipment, workspace, and hiring add $6,500, $12,000, and $5,000.
Example 1’s average person is attached to $150,000.00 of revenue and $60,000.00 of payroll. This loaded hire costs $135,100.00. The gap between that revenue and this cost is 150,000 - 135,100 = $14,900.00.
That $14,900 is not profit. The $150,000 is an average, and the $135,100 includes workspace that might already be inside overhead for the whole team. Stacking eight loaded costs on top of the payroll box would count the workplace twice. Read them as two pages: sales per person on one, the cost build of one seat on the other.
A smaller seat. Salary $60,000, payroll rate 18%, equipment $2,000, workspace $6,000, hiring $1,500.
Taxes and benefits = 60,000 × 0.18 = $10,800.
Total = 60,000 + 10,800 + 2,000 + 6,000 + 1,500 = $80,300.00.
Per month = $6,691.67. Cost above salary = $20,300.00. Multiplier = 1.34×.
Salary only, with a 10% payroll rate and nothing else: salary $72,000.
Total = 72,000 × 1.10 = $79,200.00. Per month $6,600.00. Cost above salary $7,200.00. Multiplier 1.1×.
Example 10. Employer payroll cost, then the meeting
The employer payroll page uses a different split of the same idea. Published inputs:
- Annual gross salary $72,000
- Employer payroll charges 10%
- Annual benefits $12,000
- Equipment and workspace $5,000
Employer charges = 72,000 × 0.10 = $7,200.00.
Total = 72,000 + 7,200 + 12,000 + 5,000 = $96,200.00.
Monthly average = 96,200 ÷ 12 = $8,016.67.
Cost above salary = (96,200 ÷ 72,000 - 1) = 33.6%.
Calculator result
Employer payroll cost
- Annual gross salary
- $72,000.00
- Employer payroll charges
- 10%
- Annual benefits
- $12,000.00
- Equipment and workspace
- $5,000.00
$96,200.00
estimated annual employer cost
- Employer payroll charges
- $7,200.00
- Monthly average
- $8,016.67
- Cost above salary
- 33.6%
Eight people at that loaded cost, if every seat matched this card: 8 × 96,200 = $769,600.00. Against example 1’s $1,200,000 of revenue, that is 769,600 ÷ 1,200,000 = 64.1%. The payroll box on example 1 was $480,000, a 40% share. The jump is the benefits, charges, and equipment that the $480,000 did not include. Only use the 64.1% if those eight seats really each cost $96,200. The revenue page will not build that loaded cost for you.
A higher salary on the same page. Salary $95,000, employer charges 12%, benefits $18,000, equipment $4,000.
Charges = 95,000 × 0.12 = $11,400.00.
Total = 95,000 + 11,400 + 18,000 + 4,000 = $128,400.00.
Monthly average = $10,700.00. Cost above salary = 35.2%.
A bare wage. Salary $48,000, employer charges 7.65%, benefits $0, equipment $0.
Charges = 48,000 × 0.0765 = $3,672.00.
Total = $51,672.00. Monthly average = $4,306.00. Cost above salary = 7.7%.
The 7.65% is a rate you type. The page does not look up a tax table.
The meeting page prices an hour, not a year. Published inputs: 8 people, average compensation $95,000, 60 minutes, employer overhead 25%, 1,920 working hours in the year.
Loaded hourly cost = 95,000 × 1.25 ÷ 1,920, which prints as $61.85.
Meeting cost = 8 × that unrounded hour × 60 ÷ 60 = $494.79.
Cost per attendee = $61.85.
A weekly repeat prints $25,729.17.
Cut it to 30 minutes and the cost is $247.40, at the same hourly rate. The weekly repeat prints $12,864.58.
A shorter room. Six people, average pay $72,000, 25 minutes, overhead 20%, 2,080 hours.
Loaded hourly = 72,000 × 1.20 ÷ 2,080, printed as $41.54.
Meeting = 6 × (72,000 × 1.20 ÷ 2,080) × 25 ÷ 60 = $103.85.
Per attendee = $17.31. Weekly for a year = $5,400.00.
Two people, $120,000 average, 45 minutes, overhead 30%, 1,920 hours.
Loaded hourly = 120,000 × 1.30 ÷ 1,920 = $81.25.
Meeting = 2 × 81.25 × 45 ÷ 60 = 121.875, printed as $121.88.
Weekly for a year = $6,337.50.
Set the published hour next to example 1’s revenue, using the meeting page’s 1,920 hours. Revenue for the whole team in one of those hours is 1,200,000 ÷ 1,920 = $625.00. One person’s share is 150,000 ÷ 1,920 = 78.125, which rounds to $78.13. The meeting costs $494.79. The gap on the team hour is 625.00 - 494.79 = $130.21, before materials and every other cost.
The headcount cases side by side
| Case | Revenue | People | Payroll | Per person | Payroll each | Payroll share |
|---|---|---|---|---|---|---|
| 1. Published | $1,200,000 | 8 | $480,000 | $150,000.00 | $60,000.00 | 40% |
| 2. Two hires | $1,200,000 | 10 | $600,000 | $120,000.00 | $60,000.00 | 50% |
| 3. Revenue +20% | $1,440,000 | 8 | $480,000 | $180,000.00 | $60,000.00 | 33.3% |
| 4. Fractional team | $780,000 | 6.5 | $260,000 | $120,000.00 | $40,000.00 | 33.3% |
| 5. Solo, no payroll | $180,000 | 1 | $0 | $180,000.00 | $0.00 | 0% |
| 5. Solo, with draw | $180,000 | 1 | $72,000 | $180,000.00 | $72,000.00 | 40% |
| 6. Plus contractors | $1,200,000 | 12 | $480,000 | $100,000.00 | $40,000.00 | 40% |
| 7. Sixteen people | $640,000 | 16 | $320,000 | $40,000.00 | $20,000.00 | 50% |
| 7. Four people | $640,000 | 4 | $280,000 | $160,000.00 | $70,000.00 | 43.8% |
| 8. One month | $100,000 | 8 | $40,000 | $12,500.00 | $5,000.00 | 40% |
Example 9’s loaded seat is $135,100, which is $14,900 under the published $150,000 of revenue per person. Example 8 is what happens when a month is labeled as a year. Multiply that $12,500 by 12 before you compare it with a salary.