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Employee turnover cost calculator

Find out what your business loses every time someone leaves: separation, recruiting, training and the months before the replacement is fully productive, with the annual cost and the savings from lower turnover.

Educational simulation. Not investment advice. Results are estimates based on the data you enter and do not replace advice from a qualified professional.

Reviewed on Nov 1, 2026

Example: a company with 80 employees and 24 separations last year.

Headcount and separations
Cost of each replacement

Include job ads, agency fees, interview hours, background checks, equipment, courses and the trainer’s hours.

Target

Separation costs depend on local labor law, type of exit and tenure: check with your HR or payroll provider.

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—Annual cost of turnover
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What each exit costs

Cost of one replacement split into separation, recruiting, training and productivity lost while the new hire learns.

Tap the chart to see the values.

New hire ramp-up curve

Productivity month by month until it reaches 100%. The area above the line is work not done, which goes into the cost.

Tap the chart to see the values.

Cost breakdown

Per exit and per year, with the effect of reaching the target turnover.

Next step

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The summary lists your inputs, results, formulas, assumptions and sources. The full report also includes the charts and interpretations, in color. In the print dialog, choose Save as PDF.

Method, assumptions and sources

Formulas

Turnover rate = separations per year ÷ average headcount
Monthly employee cost = pay × (1 + payroll taxes and benefits)
Lost productivity = monthly cost × months to 100% × (1 − starting productivity) ÷ 2
Cost per exit = separation + recruiting + training + lost productivity; annual cost = exits × cost per exit

Assumptions and limits

  • Straight-line learning curve; lost productivity is valued at the employee’s cost (a conservative estimate). Overtime to cover the vacancy, errors and lost customers are not included.
  • Separation cost is typed in: severance and payouts depend on local law, type of exit and tenure.

Official sources and references

Frequently asked questions

What is employee turnover?

It is the share of the workforce that leaves and has to be replaced in a year: separations divided by average headcount. High turnover raises separation, hiring and training costs and drags down productivity.

How do I read the example result?

With 24 exits out of 80 employees, turnover is 30% a year. Each replacement costs $16,520, about 2.8 months of one employee’s cost ($5,850 a month). Per year that is $396,480, or 7.1% of payroll. Getting to the 15% target would avoid 12 exits and save $198,240 a year.

What goes into separation cost?

What an exit costs beyond regular payroll: severance where it applies, payout of unused paid time off, exit paperwork and HR time, and any increase in unemployment insurance costs. It varies by state, company policy and type of exit.

What is a normal turnover rate?

It varies widely by industry: retail, hospitality, call centers and construction run high, while professional and technical roles run much lower. The U.S. Bureau of Labor Statistics publishes separation rates by industry (JOLTS) for comparison.

Why include lost productivity?

Because a new hire is paid in full from day one but takes months to deliver what the person who left did. In the example, that gap is worth $7,020 per replacement, the largest single item.

How should I use the savings figure?

It shows how much it is worth investing to reduce turnover: raises, benefits, manager training, better onboarding. If an initiative costs less than the savings and has a real chance of working, it is likely to pay off.

What are the limits of this calculator?

It uses averages and a straight-line learning curve. It leaves out overtime to cover vacancies, errors, lost customers and the effect on team morale, so the real cost is usually higher.

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Cost of employee turnover: how to calculate the rate and what it costs

Employee turnover is the pace at which people leave and are replaced. Each exit has visible costs, such as severance, job ads and training, and a hidden one: the months when the new hire does not yet perform like the person who left.

How to calculate it

Turnover rate = separations in the year ÷ average headcount. The cost of each exit adds separation, recruiting, training and lost productivity. If the new hire starts at 40% and reaches 100% in 4 months, they deliver 70% on average over that time: the loss is 30% of 4 months of the employee’s cost.

Example

A company of 80 people with 24 separations a year has 30% turnover. With average pay of $4,500 and 30% payroll taxes and benefits, each employee costs $5,850 a month. Each replacement costs $16,520 ($2,500 separation, $4,000 recruiting, $3,000 training and $7,020 lost productivity), about 2.8 months of cost. Per year, $396,480, or 7.1% of payroll.

TurnoverExits per yearAnnual cost
30%24$396,480
20%16$264,320
15%12$198,240

What drives it down

Careful hiring, structured onboarding, competitive pay, growth paths and well-trained managers are the levers most often cited. Use the savings figure to size how much it is worth spending on retention.