How to calculate revenue per employee?

Divide your company's total annual revenue by the number of employees. Use full-time equivalent (FTE) counts for accuracy, and consider using average employee count over the period if you've had significant hiring or turnover.

What is a good employee to revenue ratio?

This varies significantly by industry. Software companies typically see $125,000-$300,000+ per employee, while retail might be $50,000-$150,000. Energy and utilities often show the highest ratios due to capital-intensive operations. Compare against industry peers rather than general benchmarks.

What is the formula for profit per employee?

Profit per employee = Net profit (or net income) ÷ Number of employees. This differs from revenue per employee because it accounts for all expenses. While revenue per employee shows top-line productivity, profit per employee shows bottom-line efficiency after costs.

What is a good ARR per employee?

For SaaS companies, median ARR (Annual Recurring Revenue) per employee is around $125,000 as of 2024. Bootstrapped companies often achieve higher ratios ($108,000-$125,000+) than venture-backed companies ($73,000-$125,000) due to more efficient operations and lower burn rates.

Revenue Per Employee Calculator

See how efficiently your workforce drives revenue with this simple calculator that shows what each employee contributes to your bottom line.

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How Revenue Per Employee Calculator Works

Revenue per employee is one of the most important productivity metrics for any business. It shows how much revenue each employee generates on average, giving you insight into your workforce efficiency and operational effectiveness.

The calculation is straightforward: you divide your company's total annual revenue by the number of employees. This gives you a per-employee revenue figure that you can track over time and compare against industry benchmarks.

This metric is particularly valuable for service-based businesses, tech companies, and any organization where human capital drives revenue generation. It helps you understand whether you're getting good value from your workforce investments.

Higher revenue per employee generally indicates better operational efficiency, effective use of technology, or premium pricing strategies. However, the 'good' number varies significantly by industry—software companies typically see much higher figures than retail businesses.

Use this calculator to track your progress over time, set hiring targets, or evaluate the impact of productivity improvements. It's also essential for benchmarking against competitors and making strategic decisions about workforce expansion.

Revenue Per Employee Calculator Formula Breakdown

Formula

Revenue per employee = Total annual revenue ÷ Number of employees

Variables Explained

Total Annual RevenueYour company's total revenue for the past 12 months, including all income from sales, services, and other business activities. This should match the revenue figure on your income statement or profit and loss statement.
Number of EmployeesThe total number of full-time equivalent employees in your organization. Include all staff members who contribute to revenue generation, including full-time, part-time (counted proportionally), contractors, and temporary workers.

Example Calculation

Given:

Total Annual Revenue: $2,000,000
Number of Employees: 20 employees

Calculation:

Revenue per employee = $2,000,000 ÷ 20 employees = $100,000 per employee

Result:

$100,000.00 per employee

Explanation

This example shows a company with $2 million in annual revenue and 20 employees, resulting in $100,000 revenue per employee. This figure would be considered good for many industries, though benchmarks vary significantly by sector.

Tips for Using Revenue Per Employee Calculator

💡Use full-time equivalent (FTE) counts rather than headcount to get accurate results—convert part-time employees to FTE by dividing their hours by standard full-time hours.
💡Industry benchmarks vary dramatically: SaaS companies often see $125,000-$300,000+ per employee, while retail might be $50,000-$150,000, so compare against similar businesses in your sector.
💡Track this metric quarterly or annually to identify trends—sudden drops might indicate overhiring or productivity issues, while steady increases suggest improving efficiency.

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