The number your board asks for, and the definition nobody agrees on. Whether the denominator is headcount or FTE, and whether contractors count, changes the answer materially. This calculator makes that choice visible instead of making it for you. Every number on this page is calculated in your browser and never leaves your device.
Contractor spend does not reduce revenue. It reduces margin. Revenue is top line and contractor cost is an operating expense. Contractor spend as a percent of revenue is a useful ratio. Subtracting it from revenue before dividing is not.
Revenue per employee says very little in isolation and almost everything across four quarters of your own history. The HRAnalyst™ Workbook is a printable tracker for every calculator on this site, with the formula, the recommended cadence and space for four quarters. Join the list and we will send it, along with new calculators and workforce analytics as they publish.
Formula used
Revenue per Headcount = Revenue ÷ Headcount
Revenue per FTE = Revenue ÷ FTE
Revenue per FTE Including Contractors = Revenue ÷ (FTE + Contractor FTE)
Contractor Spend Percent of Revenue = Contractor Spend ÷ Revenue
Labor Cost Total = Payroll + Employer Taxes and Benefits + Contractor Spend
Labor Cost Percent of Revenue = Labor Cost Total ÷ Revenue
Revenue is whichever basis you chose, gross or net. Payroll, employer taxes and benefits, and contractor spend are annual figures, so a quarterly revenue entry is annualized before either cost ratio is taken. Every figure is held unrounded through the calculation and rounded only when it is shown, so the numbers on screen never compound a rounding error.
A full year of revenue divided by a headcount taken on one day near the end of it is not revenue per employee. If you grew during the year, that single day count is too high and the figure comes out too low. Match the denominator to the period the revenue covers.
Headcount treats a ten hour a week employee and a full time employee as the same unit of labor, which understates output per unit of labor. Full time equivalent is the honest denominator wherever part time is a meaningful share of your workforce.
If contractors help produce the revenue, their spend belongs in the labor cost ratio. Counting the output while excluding the cost flatters both numbers at once, and the gap widens every time you shift work from payroll to contract.
The calculators and content on HRAnalyst are provided for informational purposes only and do not constitute legal, tax, or accounting advice. Compensation and compliance obligations vary by jurisdiction. Consult qualified counsel before acting on any result.
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