Express total labour cost as a share of revenue and compare it with sector norms.
The labour cost ratio is the share of revenue that total labour cost represents, expressed as a percentage. The same figure is also shown per 1,000 and as a "one in every N" odds statement, which is easier to reason about when the rate is very small. Absolute counts hide scale — a rate normalises the number so you can compare periods, channels or cohorts of different sizes, where lower is better.
Labor Cost Percentage
Labour Cost as Share of Revenue = Total labour cost ÷ Revenue × 100
Labour Cost as Share of Revenue = Total labour cost ÷ Revenue × 100 The labour cost ratio is the share of revenue that total labour cost represents, expressed as a percentage. The same figure is also shown per 1,000 and as a "one in every N" odds statement, which is easier to reason about when the rate is very small.
Absolute counts hide scale — a rate normalises the number so you can compare periods, channels or cohorts of different sizes, where lower is better.
This calculator takes 2 inputs: Total labour cost, Revenue. The pre-filled defaults are a realistic starting point — replace them with figures from your own environment for a result you can act on.