How to Calculate Revenue Per Employee
What is Revenue Per Employee?
Measures company efficiency by dividing total revenue by headcount. Benchmarks productivity and indicates scaling effectiveness.
Step-by-Step Guide
- 1Sum annual revenue (or ARR × 12)
- 2Count total employees including part-time converted to FTE
- 3Divide: revenue ÷ FTE headcount
- 4Compare to industry benchmarks
Worked Examples
Input
$1M, 10 emp
Result
$100k/emp
Common Mistakes to Avoid
- ✕Not converting part-time employees to FTE equivalents
- ✕Including non-revenue generating departments undervalues their contribution
Frequently Asked Questions
What's healthy revenue per employee?
Varies by industry; SaaS averages $150-300K, manufacturing $200-400K, professional services $200-350K.
How can I improve this metric?
Increase revenue through sales and pricing, improve margins, and optimize team structure.
Ready to calculate? Try the free Revenue Per Employee Calculator
Try it yourself →