How this calculator works
Revenue per employee divides a period's revenue by the average number of people employed in that period. It is a rough productivity signal: a company that generates more sales with the same headcount is producing more per person. The measure says nothing about profit, because a business can generate large revenue with thin margins, and it is distorted by outsourcing, contractors and part-year staff. Compare it between companies in the same industry and use the same headcount definition each time. The other modes answer planning questions: the revenue a given team must produce at a target ratio, and the headcount a revenue target can support.
Formula
Revenue per employee = annual revenue / number of employees. Revenue needed = target revenue per employee x employees. Employees needed = annual revenue / target revenue per employee.
Worked example
A company with $10,000,000 of revenue and 50 employees generates $200,000 per person. A team of 50 at a target of $250,000 per employee must produce $12,500,000. A company earning $10,000,000 at the same target could support 10,000,000 / 250,000 = 40 employees.
Advertisement
Frequently asked questions
Should contractors count as employees?
Include them only if their cost and output behave like employees and you use the same rule across the comparison. Mixing a contractor-heavy business with an employee-heavy one on different definitions makes the ratio misleading.
Is a higher ratio always better?
Not by itself. It can reflect automation and efficiency, but also underinvestment in customer service, research or maintenance. Read it with profit margins, growth and employee turnover.
Which revenue figure should I use?
Use a full period that matches the headcount: annual revenue with average annual headcount, or monthly revenue with average monthly headcount. Mixing a peak-season headcount with full-year revenue distorts the result.