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# Revenue Per Employee

#### Revenue per Employee

Calculating the revenue per employee shows the average income an organisation receives from each member of staff. This value can be used the gauge the overall efficiency and productivity levels of employees in different organisations. .

The formula uses the total revenue of the organisation for a period divided by the number of employees on the end date of the period. As the headcount figure used is at the end of the period this can in some circumstances provide a misleading figure. An alternative is the use the average headcount in the period where this is available. An organisation making a large number of hires towards the end of the period is an example of circumstance where a headcount on date may lead to a misleading figure.

It is possible to substitute the total revenue figure with the net profit value to calculate the net profit per employee.

The formula used in the calculation is:

Revenue per Employee = Total Revenue / Headcount