Revenue Per Employee Salary

This is one of the important measures of performance of employees of the company.

Revenue per employee salary. Revenue per employee is an important ratio that roughly measures how much money each employee generates for the company. In general the top tech company s revenue per employee is more than the manufacturing companies revenue per employee. Revenue per employee ratio is calculated using the formula given below. R is the total revenue.

If a software company earns 1 000 in revenue per day by hiring a software engineer and there are no other costs then the software company can pay 1 000 in salary and. Start your calculation with the companies total revenue typically gross revenue divide the revenue by the total number of workers to provide the revenue per employee figure. It equals the company s total revenue divided by the average number of employees for the period. It aids in deciding the salary and wages of the employees such that each employee positively contributes to the profit of the company.

A company has total net revenue sales of rs. Applying the above formula. Revenue per employee also called sales per employee is a financial ratio that measures the revenue generated by each employee of the company on average. The salary to revenue ratio is only meaningful if the company has no costs other than salaries or its non salary costs are so insignificant that the company can ignore them.

The earnings per employee can be calculated by using net income in place of revenue in the numerator. Fiat on the other hand makes around 538 122 per employee. The revenue per employee calculation is very simple. Revenue per employee calculates the number of sales generated by one employee or sales done by each employee.

Example 4 banking industry. Revenue of 1 1 million per employee. The revenue per employee will vary between each market where companies with low repetition activity will have the highest costs therefore will have the lowest revenue per employee amount. 20 00 000 and the number of employees in the organization are 500.

It is an easy indicator of productivity efficiency of an organization s personnel. E is the total number of employees. 4000 is the average revenue generated by each employee. The revenue per employee formula is r e rpe.

To calculate a company s revenue per employee divide the company s total.