Personnel Cost to Revenue Ratio
Calculate personnel cost as a percentage of revenue and the revenue per lira of personnel cost to monitor your labour cost burden.
Things to keep in mind:
- No "ideal" sector ratio is assumed; set your target for your own industry and business model.
- A single-period ratio can mislead because of seasonality; compare several periods.
- If the owner's own work and outsourced labour are excluded from personnel cost the ratio looks lower.
Calculator
Result
Enter the values and press Calculate to see the result here.
About this tool
The personnel cost to revenue ratio shows how much of every TRY 100 you earn goes to staff. It is one of the most watched management ratios in labour-intensive businesses such as retail, restaurants and services.
Formulas
- Personnel cost ratio (%) = Total personnel cost / Revenue × 100
- Revenue per lira of personnel cost = Revenue / Total personnel cost
The ratio and the coefficient are rounded to 2 decimals, half up (HALF_UP). Revenue must be greater than zero; if personnel cost is 0, "revenue per lira of personnel cost" shows 0 (not computable). Enter both amounts for the same period and excluding VAT.
Example 1: monthly revenue TRY 100,000 and total personnel cost TRY 25,000 give a ratio of 25.00%; each TRY 1 of personnel cost generates TRY 4.00 of revenue. If personnel cost exceeds revenue (120,000 / 100,000) the ratio is 120.00%, revenue per lira is 0.83, and revenue does not even cover payroll.
Example 2 (amounts with decimals): personnel cost of TRY 187,654.32 and revenue of TRY 654,321.09 give a ratio of 28.68% and revenue per lira of personnel cost of 3.49.
How to read the result: The higher the ratio, the larger the share of revenue that goes to payroll, leaving less for other expenses and profit. "Revenue per lira of personnel cost" is the inverse of the ratio: how many TRY of sales each TRY of labour cost brings, an indicator of labour productivity. A suitable ratio depends on the industry and business model; the tool suggests no target, so compare the result with your own earlier periods and industry averages. A single-period ratio can mislead because of seasonality.
For a fair comparison use the total employer cost (employer social security, unemployment share and benefits), not only net pay. The employer cost tool can calculate it.
How to use
- Enter the total personnel (employer) cost for the period.
- Enter revenue for the same period excluding VAT.
- Press Calculate and read the ratio and the revenue per lira.
Notes
The ratio is rounded HALF_UP to two decimals. Personnel cost and revenue must be for the same period and the same VAT basis (excluding VAT). If personnel cost is 0 the revenue-per-lira figure shows 0.
Sources
Frequently asked questions
It depends on the sector: higher in labour-intensive services, lower in automated production. Use your own history and competitor benchmarks.
Gross pay, employer social security and unemployment shares, bonuses, meals, travel and other benefits, and provisions such as severance and leave.
No. Enter net sales excluding VAT, otherwise the ratio looks lower than it is.
Personnel cost exceeds revenue so the business makes a loss before any other expense. It may be temporary; review monthly and annual ratios together.
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