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Payroll to Revenue Benchmark and Calculator

FreeAbout three minutesPeople and customers
What it does

Measures your full employment cost, including super, as a share of revenue, against the norm for your industry.

How it helps

Wages are most owners' largest cost, and the ratio drifts without anyone noticing. This shows whether your team is producing in step with what it costs, and flags when the real issue is pricing rather than people.

How this benchmark is calculated

The band shown is an indicative ProfitPulse benchmark, based on the internal commercial ranges we work with every day. It is a directional read, not a formal industry survey and not financial advice. The range shifts with your broad industry category, your size and your commercial complexity.

In about three minutes, free, you will see their full employment cost including super as a share of revenue, banded for their industry, with the usual reasons the ratio drifts.

Payroll to Revenue Benchmark

Answer a few quick questions to see where you stand.

How the payroll ratio is calculated

The formula

Employment cost to revenue = wages and super plus contractor and labour hire, divided by revenue, times 100.

Worked example

A business with 1,500,000 dollars revenue, 480,000 dollars of wages and super and 60,000 dollars of contractors has an employment cost ratio of 36 per cent, read against the band for its industry.

How to read your result

In proportion means your team produces well for what it costs. Worth a closer look means the ratio is drifting ahead of revenue. Significant opportunity means structure or pricing is the issue, and every fix flows to profit.

What each figure means

  • Revenue for the last 12 months: Your total sales for the period, before any costs are taken out.
  • Total wages and salaries including super for the same period: All wages and salaries including superannuation, for the whole team.

Common questions

What do I include in wages?

All wages and salaries including superannuation, plus contractor and labour hire spend, so the comparison is fair.

Should I include my own pay?

Include a market wage for your role. The tool asks, so it can keep the comparison even against businesses that pay the owner a salary.

Does a high ratio mean I should cut staff?

Not necessarily. It is often a pricing or workflow issue, which is why the result points you to the likely cause first.

How ProfitPulse can help

If your wage bill is drifting ahead of revenue, our fractional CFO support separates a pricing problem from a productivity one and lifts output per dollar.

More from ProfitPulse: what our work costs, what a fractional CFO does and a fractional CFO in Sydney.