Revenue per employee calculator
Divide revenue for a period by average headcount to find revenue per employee, with an optional revenue per FTE figure. See the formula, each step and a worked example, and compare benchmarks only for the same period length.
Work out revenue per employee for a period you choose. Enter revenue for the period, the number of employees at the start and at the end of that same period and, if you have it, the average number of full-time equivalents (FTE). This free revenue per employee calculator averages the two headcounts, divides revenue by that average and shows every step of the working.
How to calculate revenue per employee
- Choose the period first, such as last financial year or one quarter, and what you are measuring, such as the whole business or one store.
- Enter revenue for that period. Keep one basis, such as net sales before tax and after returns.
- Enter how many employees were on the payroll on the first day of the period, then how many on the last day. Count each person once, whether they work full time or part time.
- Optionally, enter the average number of full-time equivalents for the same period. Enter 0 to skip it.
- Select Calculate, or load Use example. Copy the result and write the period beside it.
Headcounts are whole numbers of people. The average can end in .5, because it is the mean of two counts. At least one of the two headcounts must be above zero.
Revenue per employee formula
Average headcount = (opening headcount + closing headcount) ÷ 2
Revenue per employee = revenue for the period ÷ average headcount
Revenue per FTE = revenue for the period ÷ average full-time equivalents
Revenue and headcount must cover the same period. Averaging the opening and closing counts stops a shop that hired just before the period ended from looking less productive than it was, which dividing by the closing headcount alone would do. It is the same average the employee turnover calculator uses. When headcount swings sharply or seasonally during the period, two snapshots may not represent it well, and an average of monthly headcounts is closer.
One FTE is one person's full-time hours. Two people who each work half of a full-time week make one FTE. To find it, divide the hours everyone worked in the period by the hours of one full-time schedule over the same period. With a 40-hour week, 11,648 hours worked in 52 weeks is 11,648 ÷ 2,080 = 5.6 FTE. The timesheet calculator and hours-to-decimal converter help with the hours.
Worked example
Meadow Corner, a fictional gift shop, measures its last financial year:
| Input or result | Value |
|---|---|
| Revenue for the year | $840,000 |
| Employees at the start of the year | 6 |
| Employees at the end of the year | 8 |
| Average full-time equivalents | 5.6 |
| Average headcount | 7 |
| Revenue per employee | $120,000 |
| Revenue per FTE | $150,000 |
Six plus eight is 14, and 14 ÷ 2 = 7 employees on average. $840,000 ÷ 7 gives revenue per employee of $120,000 for the year. Several of the team work part time, so the 5.6 FTE figure is lower than the headcount and revenue per FTE is higher: $840,000 ÷ 5.6 = $150,000.
Compare benchmarks for the same period length
The result scales with the length of the period. A quarter's revenue per employee is about a quarter of the annual figure, so a quarterly result set against an annual benchmark looks four times worse than it is. Compare a quarter with a quarter and a year with a year. Most published industry figures are annual.
Check how a benchmark counts people too. The U.S. Census Bureau's Statistics of U.S. Businesses reports employment during the week of March 12, with receipts only for years ending in 2 and 7. Its definition of paid employment counts full- and part-time employees alike and leaves out sole proprietors and partners of unincorporated businesses. A ratio built from those figures divides a year's receipts by one week's head count, so it will not match your own opening and closing average exactly.
Industry matters as well. A shop selling high-priced goods with few staff shows more revenue per person than a café with the same sales, without either being better run. Revenue per employee is also not the productivity figure national statistics publish: the UK Office for National Statistics' productivity measures use output per worker, per job and per hour, measured as gross value added. That leaves out the goods and services a business buys in, so for a shop that resells stock it is far smaller than revenue.
Read the result alongside costs and growth
A higher figure is not automatically better. Revenue per employee can rise because the shop is short-staffed and customers are waiting, or fall for a sound reason, such as hiring ahead of a busy season. Track it over several matching periods and note changes in opening hours, staffing or prices beside each result.
Revenue is not profit. Compare the result with what each person costs using the staff cost calculator, check whether sales cover fixed costs with the break-even calculator, and measure the change in sales between two matching periods with the sales growth calculator. Keep monthly revenue totals in the income and expense tracker.
Frequently asked questions
Can I use the revenue per employee calculator without an account?
Yes. Enter the figures and calculate. Nothing is saved or sent, so use Copy result to keep the figures and steps.
Should I count part-time employees?
Count every employee once in the headcount, whether they work full time or part time. To allow for part-time hours, also enter the average FTE for the period. Revenue per FTE compares businesses with different mixes of full-time and part-time staff more fairly.
Do I include the owner or contractors?
Decide once and keep to it. Some businesses count a working owner, while others count only people on the payroll, which is closer to the Census Bureau's definition. Contractors and agency staff are usually not employees. Write the definition beside the result so next year's figure is comparable.
What is a good revenue per employee?
It depends on the industry, the prices you charge and how people are counted. Compare with figures for the same industry, period length and counting method, or with your own result for the same period last year, rather than with one universal number.
Can I calculate revenue per employee for a month?
Yes. Enter the month's revenue and the headcounts on the first and last days of that month, and label the result as monthly. Multiplying a busy month by twelve overstates the year, so compare monthly results with the same month in another year.
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