HR formulas every employer should know
What gets measured gets managed. These formulas turn everyday HR records into numbers that show where money is being lost, where people risks are building and whether your HR decisions are working. You do not need special software: a spreadsheet, or PayPro TT and HRPro TT, holds everything you need.
Workforce and turnover
Losing staff is expensive. Every leaver costs you recruitment, training and lost productivity. Measuring turnover shows whether you are keeping the people you invest in.
Average headcount
Why use it
Most HR rates are worked out per employee, so you need a fair figure for how many people you employed over the period.
Formula
(Headcount at start of period + Headcount at end of period) ÷ 2
Worked example
38 employees on 1 January and 42 on 31 December. (38 + 42) ÷ 2 = 40.
Value to your organisation
It makes your other rates accurate and comparable from year to year, even when your business grows or shrinks.
Watch for
Large swings during the year. If headcount changes a lot, use the average of each month's headcount instead.
Employee turnover rate
Why use it
It tells you what share of your workforce left during the period.
Formula
(Number of leavers in the period ÷ Average headcount) × 100
Worked example
6 people left during the year and average headcount was 40. (6 ÷ 40) × 100 = 15%.
Value to your organisation
High turnover drains money through recruitment, training and lost output. Tracking it lets you spot problems with pay, management or working conditions early and fix them before they spread.
Watch for
A rising rate quarter on quarter, or one department or manager with far more leavers than others.
Try it
Average headcount40
Turnover rate15.0%
Retention rate
Why use it
It shows how many of the people you started the year with are still with you.
Formula
(Employees at start of period still employed at end ÷ Employees at start of period) × 100
Worked example
38 employees on 1 January, of whom 33 are still employed on 31 December. (33 ÷ 38) × 100 = 86.8%.
Value to your organisation
It measures how well you keep the experience and customer relationships you have already built, which new hires cannot replace quickly.
Watch for
Losing your most experienced or highest-performing people, even if the overall rate looks healthy.
Early turnover rate
Why use it
It shows how many leavers quit within their first year.
Formula
(Leavers with less than 12 months' service ÷ Total leavers) × 100
Worked example
3 of the year's 6 leavers had been employed less than 12 months. (3 ÷ 6) × 100 = 50%.
Value to your organisation
A high figure points to problems with hiring, job descriptions or onboarding. Fixing these is usually cheaper than recruiting again.
Watch for
People leaving in the first three months, which often means the job was not what they were told.
Recruitment
A bad or slow hire costs more than the salary. These measures show how efficiently you fill jobs and whether your offers attract the people you want.
Time to fill
Why use it
It shows how long a job stays empty.
Formula
Total days from job approval to offer accepted, for all roles filled ÷ Number of roles filled
Worked example
Three roles took 28, 35 and 42 days. (28 + 35 + 42) ÷ 3 = 35 days.
Value to your organisation
Empty roles mean lost sales, overtime for other staff and burnout. Knowing your time to fill lets you start recruiting early enough and plan cover.
Watch for
Some roles always taking much longer, which suggests a skills shortage or pay below the market.
Cost per hire
Why use it
It shows what it really costs to bring in each new employee.
Formula
(External costs + Internal costs) ÷ Number of hires
Worked example
Advertising TT$3,000, agency fees TT$12,000 and managers' interview time valued at TT$3,000, for 4 hires. (3,000 + 12,000 + 3,000) ÷ 4 = TT$4,500 per hire.
Value to your organisation
It puts a price on turnover and shows which recruitment methods give the best value, so you can spend your budget where it works.
Watch for
Rising agency fees, or repeat hiring for the same role.
Try it
Cost per hireTT$4,500.00
Offer acceptance rate
Why use it
It shows how often your chosen candidate says yes.
Formula
(Offers accepted ÷ Offers made) × 100
Worked example
5 offers made and 4 accepted. (4 ÷ 5) × 100 = 80%.
Value to your organisation
A low rate wastes the time and money already spent on recruiting, and usually signals pay, benefits or reputation problems you can address.
Watch for
Candidates turning down offers for the same reason, such as pay or hours.
Attendance and overtime
Every day lost to absence or covered by overtime costs money. These measures show whether attendance is a problem and where.
Absenteeism rate
Why use it
It shows what share of working time is lost to unplanned absence.
Formula
(Days lost to unplanned absence ÷ (Number of employees × Working days in the period)) × 100
Worked example
20 employees, 21 working days in the month and 13 days of unplanned absence. 13 ÷ (20 × 21) = 13 ÷ 420 = 3.1%.
Value to your organisation
Absence reduces output and pushes up overtime. Measuring it lets you tackle patterns early, through return-to-work conversations, better scheduling or support for staff who are struggling.
Watch for
Absences clustered around weekends, public holidays or paydays, or concentrated in one team.
Try it
Absenteeism rate3.1%
Overtime as a percentage of hours
Why use it
It shows how much of your work depends on overtime.
Formula
(Overtime hours ÷ Total hours worked) × 100
Worked example
3,500 normal hours and 280 overtime hours in the month. 280 ÷ (3,500 + 280) = 280 ÷ 3,780 = 7.4%.
Value to your organisation
Overtime is paid at premium rates and wears people out. A steady high figure can mean it is cheaper to hire another person than keep paying overtime.
Watch for
The same people working overtime every month, which raises costs and the risk of fatigue and accidents.
Pay and labour cost
Pay is usually an SME's largest cost. These measures show whether you are getting value from it and paying fairly and lawfully.
Labour cost as a percentage of revenue
Why use it
It shows how much of every dollar earned goes on employing people.
Formula
(Total employment cost ÷ Revenue) × 100
Worked example
Total employment cost of TT$1,800,000 and revenue of TT$6,000,000 for the year. (1,800,000 ÷ 6,000,000) × 100 = 30%.
Value to your organisation
It shows whether your staffing is affordable as the business changes. It is the first number to check before hiring, giving increases or responding to cost rises such as the 2027 NIS increase.
Watch for
The percentage rising while revenue stays flat.
Revenue per employee
Why use it
It is a simple measure of how productive your workforce is.
Formula
Revenue ÷ Average headcount
Worked example
Revenue of TT$6,000,000 and average headcount of 40. 6,000,000 ÷ 40 = TT$150,000 per employee.
Value to your organisation
Tracked over time, it shows whether new hires, training or new equipment are actually raising output.
Watch for
A fall after a hiring drive, which can mean new staff are not yet productive or roles overlap.
Compa-ratio
Why use it
It compares what you pay someone with the midpoint of the pay range for their job.
Formula
(Employee's pay ÷ Midpoint of the pay range) × 100
Worked example
An employee earns TT$7,200 a month and the range midpoint is TT$8,000. (7,200 ÷ 8,000) × 100 = 90%.
Value to your organisation
It helps you pay consistently and defensibly, spot people who are underpaid and at risk of leaving, and avoid equal pay complaints.
Watch for
People doing the same job with very different compa-ratios and no clear reason, such as experience or performance.
Hourly rate from a monthly salary
Why use it
You need the hourly rate to check the minimum wage and calculate overtime for monthly-paid staff.
Formula
Monthly salary ÷ 173.33 (for a 40-hour week: 40 × 52 ÷ 12 = 173.33 hours a month)
Worked example
A monthly salary of TT$5,200. 5,200 ÷ 173.33 = TT$30.00 an hour.
Value to your organisation
It keeps you compliant with the TT$20.50 minimum wage and shows whether a worker earns up to TT$30.75 an hour, the limit for the statutory overtime rates.
Watch for
Long or unpaid hours that push the true hourly rate below the minimum wage.
Overtime pay at the statutory rates
Why use it
It works out the overtime due to workers covered by the Minimum Wages Order (those earning up to TT$30.75 an hour).
Formula
On a normal workday: first 4 overtime hours × hourly rate × 1.5, next 4 hours × 2, then × 3
Worked example
A worker on TT$25.00 an hour works 6 overtime hours on a normal workday. (4 × 25 × 1.5) + (2 × 25 × 2) = 150 + 100 = TT$250.
Value to your organisation
Paying overtime correctly avoids back-pay claims and disputes, and the figures feed directly into your overtime percentage.
Watch for
Overtime paid at a flat rate to workers entitled to the statutory rates.
Statutory and hidden costs (Trinidad and Tobago)
The true cost of an employee is more than their salary. These measures show the costs that catch employers out, including NIS, leave and severance.
Employer NIS as a percentage of pay
Why use it
It shows how much NIS adds to the cost of each employee. NIS is charged as fixed weekly amounts by earnings class, multiplied by the number of Mondays in the month. This formula turns that amount into a percentage so you can compare it with pay.
Formula
(Employer NIS for the month ÷ Gross pay for the month) × 100
Worked example
An employee earning TT$8,500 in a month with 4 Mondays (NIS Class XI, 2026 rates). Employer NIS is TT$875.20. (875.20 ÷ 8,500) × 100 = 10.3%.
Value to your organisation
The total NIS contribution rate, on which the earnings-class amounts are based, rises from 16.2% to 19.2% in January 2027, with employers paying two-thirds. The weekly amounts in every class will rise. Knowing the figure lets you budget for the increase instead of being caught by it.
Watch for
Budgets that still use 2026 NIS rates for 2027.
Total employment cost per employee
Why use it
It shows what an employee really costs you, not just their salary.
Formula
Gross pay + Employer NIS + Other employer-paid costs (such as group health, pension, uniforms and training)
Worked example
Gross pay TT$8,500 + employer NIS TT$875.20 + group health plan TT$400 = TT$9,775.20 a month, or TT$117,302.40 a year.
Value to your organisation
It is the right figure for pricing your work, deciding whether to hire, and comparing an employee with a contractor.
Watch for
Quoting or budgeting jobs on salary alone.
Try it
Gross payTT$8,500.00
Employer NIS (Class XI)TT$875.20
Other costsTT$0.00
Total monthly employment costTT$9,375.20
Employer NIS as % of pay10.3%
Annual cost estimateTT$112,502.40
Assumes every month is like this one. Months with five Mondays cost more.
From January 2027 the total NIS contribution rate rises to 19.2%. Update this estimate when the new earnings-class amounts are published.
Vacation leave liability
Why use it
It shows what you owe staff for vacation they have earned but not taken.
Formula
Untaken vacation days × Daily rate (for monthly-paid staff on a five-day week: monthly salary × 12 ÷ 260)
Worked example
An employee earning TT$8,500 a month has 10 untaken days. Daily rate: 8,500 × 12 ÷ 260 = TT$392.31. 10 × 392.31 = TT$3,923.08.
Value to your organisation
Unpaid leave builds up quietly and must often be paid out when people leave. Tracking it protects your cash flow and helps you plan cover.
Watch for
People carrying large balances year after year.
Severance liability
Why use it
It shows what you would owe if you had to retrench someone.
Formula (Retrenchment and Severance Benefits Act, monthly-paid staff, more than one year of service)
half a month's basic pay for each year in years 1 to 4, plus three-quarters of a month's basic pay for each year from year 5. Weekly-paid staff: 2 weeks' basic pay per year for years 1 to 4, then 3 weeks per year.
Worked example
An employee on TT$8,500 a month with 7 years' service. (4 × 0.5) + (3 × 0.75) = 4.25 months. 4.25 × 8,500 = TT$36,125.
Value to your organisation
It shows the cost of restructuring before you decide, and helps you set money aside. A bill now before Parliament could roughly double these amounts.
Watch for
Long-serving staff whose liability has grown without being planned for.
Training and development
Training is how you build skills you cannot easily hire. These measures show whether you are investing enough, and fairly.
Training cost per employee
Why use it
It shows how much you invest in each person's development.
Formula
Total training spend ÷ Average headcount
Worked example
TT$60,000 spent on training in the year with an average headcount of 40. 60,000 ÷ 40 = TT$1,500 per employee.
Value to your organisation
Compared with turnover and productivity, it shows whether training is paying off in skills and retention.
Watch for
Training going to the same few people every year.
Training hours per employee
Why use it
It shows how much time people spend learning.
Formula
Total training hours ÷ Average headcount
Worked example
480 training hours in the year with an average headcount of 40. 480 ÷ 40 = 12 hours per employee.
Value to your organisation
It tracks whether development is actually happening, including low-cost options such as on-the-job training and government programmes.
Watch for
Safety-critical roles with no recorded training.
Health and safety
Accidents cost money, morale and sometimes lives. These rates let you compare safety performance over time, whatever the size of your workforce.
Lost-time injury frequency rate
Why use it
It shows how often injuries cause time off work.
Formula
(Number of lost-time injuries × 200,000) ÷ Total hours worked. (200,000 hours is roughly 100 full-time employees for a year. Some organisations use 1,000,000 instead; use the same figure every time.)
Worked example
2 lost-time injuries and 83,200 hours worked (40 employees × 2,080 hours). (2 × 200,000) ÷ 83,200 = 4.8.
Value to your organisation
It shows whether your safety measures are working, supports your OSH Act duties, and helps when clients ask for safety records before awarding contracts.
Watch for
Any rise, and near misses that are not being reported.
Accident severity rate
Why use it
It shows how serious your injuries are, not just how many.
Formula
(Days lost to injury × 200,000) ÷ Total hours worked
Worked example
30 days lost and 83,200 hours worked. (30 × 200,000) ÷ 83,200 = 72.1.
Value to your organisation
A few serious injuries can cost more than many minor ones. This rate shows where to focus your safety spending.
Watch for
A high severity rate with a low frequency rate, which points to a few serious hazards.
Last reviewed: October 2026
General guidance only, not legal advice.