Free ForeverNo SignupLabour AnalyticsUpdated 2026

Workforce Cost Calculator

Calculate your total workforce investment — and benchmark labour cost as a percentage of revenue.

Your total workforce cost includes all salaries, employer taxes, benefits, contractors, training, and HR overhead. For SaaS companies, labour typically represents 60–75% of operating expenses. Knowing your total workforce cost as a percentage of revenue tracks efficiency as you scale.

Total Annual Salaries

Sum of all employee base salaries

Benefits & Payroll Taxes

Total employer-paid benefits and payroll taxes

Contractor / Freelancer SpendOptional — includes external workforce

Annual spend on external contractors and agencies

Training & DevelopmentOptional — includes L&D investment

L&D budget, conferences, courses

Annual RevenueOptional — calculates % of revenue

Company revenue for the same period

The Formula

Workforce Cost = Salaries + Benefits + Contractors + Training. Labour % = Cost ÷ Revenue × 100

In plain English

Total workforce cost = salaries + benefits/taxes + contractors + training. Labour % = total cost / revenue × 100.

Worked Example

$3M salaries + $750K benefits + $200K contractors = $3.95M. On $8M revenue: 49.4% of revenue.

Labour Cost as a % of Revenue

Labour cost as a percentage of revenue is the key efficiency metric for workforce investment. Early-stage companies (< $2M ARR) often run at 80–100% because headcount is ahead of revenue. The ratio should decline as revenue scales.

SaaS benchmarks: seed stage 70–90%, Series A 60–75%, Series B 50–65%, mature 40–55%. Pure software companies (no services) tend lower; services-heavy companies trend higher.

60–75%

Labour as % of OPEX (typical SaaS)

40–55%

Labour as % of revenue (mature SaaS)

25–30%

Benefits as % of salary (typical US)

5–10%

Training as % of salary (high-investment companies)

Workforce Cost % of Revenue by Stage (2026)

Stage / ARR	Labour % of Revenue	Trend	Action
Pre-revenue	N/A	Declining as revenue grows	Minimise burn
< $2M ARR	70–90%	High, declining	Grow revenue faster
$2–10M ARR	55–75%	Improving	Optimise mix
$10M+ ARR	40–60%	Target zone	Maintain efficiency

Source: Bessemer Venture Partners Atlas 2025 · OpenView SaaS Benchmarks 2024

Common Mistakes

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Not including contractors in workforce cost

Contractors are workforce cost — they just don't appear on the payroll. Include all external labour spend in your total workforce cost for an accurate picture of labour intensity.

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Treating workforce cost as fixed

Salaries are largely fixed quarter-to-quarter, but workforce cost is manageable over 6–12 months. Hiring freezes, attrition without backfill, and contractor offboarding are levers that can reduce workforce cost quickly when needed.

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Comparing gross labour cost without accounting for model differences

A 70% labour-as-revenue company with 80% gross margin is very different from a 70% labour company with 40% gross margin. Always analyse workforce cost in the context of your gross margin and business model.