Enter the total overhead costs and the total number of employees into the calculator to determine the cost per employee.

## Cost Per Employee Formula

The following equation is used to calculate the Cost Per Employee.

CPE = AOC / #E

• Where CPE is the cost per employee (\$/employee)
• AOC is the annual overhead costs (\$)
• #E is the number of employees

To calculate cost per employee add together the costs of wages and benefits for the entire company, then divide by the number of employees.

## What is Cost Per Employee?

Definition:

Cost per employee is a business metric used to describe the true cost per employee at a company. This takes into account salaries and benefits.

## How to Calculate Cost Per Employee?

Example Problem:

The following example outlines the steps and information needed to calculate Cost Per Employee.

First, determine the total annual cost for wages and benefits in the business. In this example, this is found to be \$500,000.00.

Next, determine the total number of employees. this company has 15 employees.

Finally, calculate the cost per employee using the formula above:

CPE = AOC / #E

CPE = \$500,000 / 15

CPE = \$33,333.34 /employee