Employee ROI Calculator

How It Works

Hiring is one of the largest financial decisions a business makes, and most businesses only ever look at the base salary.
The full “loaded cost” of an employee runs 25 to 40% above that salary, and the gap is not optional spending. Payroll taxes, insurance and workspace arrive whether the hire works out or not.

What is loaded cost? The loaded cost (also called total employment cost) includes:

• Base salary: the agreed annual pay
• Benefits: health insurance, retirement contributions, paid leave, disability, and other perks (typically 20–35% of base salary)
• Overhead: physical workspace, equipment, software licenses, HR administrative time, and utilities attributable to the employee

A common rule of thumb: multiply base salary by 1.25–1.4 to get total annual employment cost.

The ROI formula:

• Total Annual Cost = Salary + (Salary × Benefits%) + Overhead
• Annual Profit Contribution = Revenue Generated − Total Annual Cost
• ROI = (Annual Profit Contribution ÷ Total Annual Cost) × 100
• Training Payback Period = Training Cost ÷ Annual Profit Contribution

Interpreting ROI:

• ROI > 100%: Strong hire. The employee generates more than double their cost. Excellent for revenue-generating roles.
• ROI 50–100%: Acceptable. Common for mid-level sales, account managers, or mixed roles.
• ROI 0–50%: Marginal. Common for support, admin, or early-stage roles where value is indirect.
• ROI < 0%: Negative. The employee costs more than they generate. Reassess role scope or revenue expectations.

Revenue per employee benchmarks (annual):

These match the table on the revenue per employee calculator, which is the page to use if you want to check the whole company rather than one hire.

Support staff and indirect value: Not all employees generate direct revenue. For support roles (HR, IT, admin), estimate their value by calculating what it would cost to outsource that function, or how much revenue their work enables (e.g., an IT person keeping systems running for a 10-person sales team).

Training investment: Onboarding and training costs typically run $3,000–$10,000+ per new hire. This calculator shows how many months of profit contribution it takes to recover that initial investment.