Revenue Per Employee Vs Salary

As nouns the difference between revenue and salary is that revenue is the income returned by an investment while salary is a fixed amount of money paid to a worker usually measured on a monthly or annual basis not hourly as wages implies a degree of professionalism and or autonomy.

Revenue per employee vs salary. It aids in deciding the salary and wages of the employees such that each employee positively contributes to the profit of the company. Metrics related to payroll to revenue ratio full time equivalents revenue cost per hire. As a verb salary is to pay on the basis of a period of a week or longer especially to convert from another. If a company employs 50 people and has a revenue of 7 5m annually their revenue per employee ratio is 150 000 on an annual basis.

Salary per employee compared to revenue per employee a performance measurement the graph below was created using google s graph tools. Let s say you can effectively run your dealership and hit the target salary expense ratio with 5 people based on 2 000 000 in gross sales. 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. Revenue per employee is an essential financial ratio.

Calculate the revenue per employee ratio for apple inc. Revenue per employee formula. What happens if your gross sales increase to 3 000 000 and to adequately service that volume you must add 3 more employees. Revenue per employee is the ratio of revenue generated per employee of a company on an average.

Brian dainis published and updated dates. On the other hand companies that have the highest repetition and more streamlined technology solutions will have the highest revenue per employee amounts. Revenue per employee ratio is calculated using the formula given below. Revenue per employee vs payroll to revenue ratio.

If they begin working on a new product line and hire an additional 25 employees based on the same revenue their revenue per employee ratio will be 100 000 annually. To calculate a company s revenue per employee divide the company s total. This ratio gives an idea about how the company will perform in a specific quarter especially considering the revenue vs cost of each employee of the company. The horizontal bar graph shows for 11 business sectors the average sales per employee and the average revenue per employee for 2007.

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.