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Employee Turnover Yearly Cost Estimator

The Employee Turnover Yearly Cost Estimator converts an annual turnover rate into an estimated number of departures and a corresponding yearly replacement cost. HR teams, finance partners, and workforce planners can use it to size the direct economic effect of turnover under a simple cost-per-departure assumption.

The calculation starts with average headcount and annual turnover rate, then multiplies expected departures by the average cost associated with replacing one employee. That per-departure cost can include recruiting, onboarding, temporary coverage, training, or other costs you choose to include. The result is a planning estimate and should be interpreted according to the cost definition used in your organization.

Turnover cost assumptions

employees
%
$
Result
—
Estimated annual turnover cost
Estimated annual departures—
Average cost per departure—
Annual turnover cost—
Cost per employee—

1. Enter average headcount
Use a representative average workforce size for the year rather than a single unusually high or low point.

2. Enter annual turnover rate
Use the share of employees who leave during a year, expressed as a percentage of the workforce basis you use internally.

3. Set cost per departure
Include only the cost components you want this estimate to represent, such as recruiting, onboarding, training, or temporary coverage.

4. Review estimated departures
The calculator converts the turnover percentage into an expected annual departure count.

5. Review annual and per-employee cost
Use both views to compare scenarios with different turnover rates or replacement-cost assumptions.

Annual departures = Average headcount × Annual turnover rate
Annual turnover cost = Annual departures × Average cost per departure
Cost per employee = Annual turnover cost ÷ Average headcount

The turnover rate is converted from a percentage to a decimal. The model applies one average cost to every departure, so use separate runs if replacement costs differ substantially by job family or seniority.

What the result means

Use the result as a scenario estimate based on the inputs shown above; compare alternative assumptions to understand which drivers have the largest effect.

This calculator is intended for operational planning and does not replace organization-specific accounting, HR, clinical, legal, or professional judgment.

Given

  • 500 average employees
  • 18% annual turnover
  • $12,000 average cost per departure

Calculation
Departures = 500 × 0.18 = 90. Annual turnover cost = 90 × $12,000 = $1,080,000. Cost per employee = $1,080,000 ÷ 500 = $2,160.

Result
Estimated annual turnover cost: $1,080,000.

The model implies about 90 departures per year and an average turnover burden of $2,160 per employee across the workforce.

What costs should be included in cost per departure?

Include the cost categories you want to evaluate, such as sourcing, recruiter time, onboarding, training, or temporary coverage. Keep the definition consistent when comparing periods.

Does this calculator include lost productivity?

Only if you embed lost productivity in the cost-per-departure input. For a more explicit productivity model, use a separate productivity-loss estimate.

Should involuntary and voluntary turnover be combined?

They can be combined for a total turnover estimate, but separate calculations are often more informative when the causes and replacement costs differ.

What if headcount changes during the year?

Use average headcount for the period. A beginning- or end-of-year snapshot can distort the implied number of departures in a growing or shrinking workforce.

How can I compare two turnover scenarios?

Run the calculator with the same headcount and cost assumptions but different turnover rates. The difference in annual cost shows the modeled financial effect of the rate change.