How to calculate employee turnover rate
- Turnover rate for the period, percent
- 29
- Average headcount
- 21
- Annualised turnover rate, percent
- 29
- Cost of replacing one employee
- $22,500
Every figure on this page is computed from the inputs you enter, by the method stated below it. The only constants HeadcountDesk supplies are the published federal payroll tax rates and the overtime multiplier, each cited where it is used. The defaults are a worked example to replace with your own.
The figures above start from a worked example (29). Change any input and the answer updates as you type.
Download the How to calculate employee turnover rate worked example (CSV)
This calculates an employee turnover rate the standard way, separations in the period divided by average headcount, annualises it so a quarter can be compared with a year, and then puts a cost on it. The cost uses the average salary of the people who left and a replacement cost expressed as a percentage of salary, which Gallup puts at one-half to two times annual salary as a conservative estimate. The page defaults to the bottom of that range and shows what halving the turnover would have saved, because that is the number a retention decision is made against.
Average headcount, not starting headcount, is the divisor
Six people leaving a team that grew from twenty to twenty-two over the year is a turnover rate against the average of twenty-one, not against twenty. The difference is small at this size and large in a fast-growing business, which is exactly where the rate is most often quoted wrongly. The page averages the start and end headcount, which is the convention that makes one employer's rate comparable with another's.
Annualise before you compare
Three leavers in a quarter is not a 15% turnover rate, it is a 15% quarterly rate and a 60% annualised one. The page scales the rate by twelve over the months in the period so that a quarter, a half year and a year read on the same footing, and a rate that looks tolerable for a quarter shows what it means over a year.
The replacement cost is the argument for fixing it
Recruiting, the vacancy, onboarding, the months before a new person reaches full productivity and the manager's time all cost money, and Gallup's range of one-half to two times salary is the published figure for what they add up to. The page defaults to 50%, the conservative end, and lets you set your own. Multiplied by the leavers, it is the cost of the year's turnover; halved, it is what a retention effort is worth before it costs anything.
How to calculate employee turnover rate: common questions
How do you calculate employee turnover rate?
Divide the number of employees who left during the period by the average headcount over the period, then multiply by 100. Average headcount is the start and end figures added and halved. The worked example, six leavers from a team averaging twenty-one, is a 29% rate for the year; the page does the arithmetic from your own figures.
What counts as a separation?
Anyone who left the payroll in the period, whether they resigned, were dismissed or retired. Internal transfers and promotions do not count, and neither do temporary workers whose assignment ended as planned unless you track them as headcount.
What does employee turnover cost?
Gallup's published estimate is one-half to two times the annual salary of the person replaced, described as conservative. The page applies the percentage you choose, starting at 50%, to the average salary of your leavers and multiplies by how many left. It is an estimate of your own cost, not an industry figure.
What is a good turnover rate?
Lower than last year's, measured the same way. Rates differ so much by industry, role and region that a national figure says little about one small employer; the useful comparison is your own rate over time and the cost it carries at your salaries.
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Where the constants in this tool come from
Gallup: This Fixable Problem Costs U.S. Businesses $1 Trillion. The one-half to two times salary replacement cost range the page's default is taken from.
Cite or embed this figure
How to calculate employee turnover rate (Turnover rate for the period, percent): 29, HeadcountDesk, worked example.
Cite as: "How to calculate employee turnover rate, HeadcountDesk", updated 2026-09-02, https://headcountdesk.com/tools/employee-turnover-rate-calculator/.