Methodology
Revenue per Employee Scenario Planner methodology
Educational only: Business decision support, not accounting, tax or legal advice.
Privacy: Calculations run locally; Margin101 does not receive your commercial inputs.
Update policy: Reviewed when formulas or official dependencies change.
Scope: Market-neutral small-business planning using your own assumptions.
1. Formulas and units
revenuePerFteExTax = revenue ÷ FTEWhere
- revenueExTax
- Ex-tax revenue (currency units on one consistent ex-tax basis)Source: Business record
- revenuePerFteExTax
- Revenue per FTE (money)Source: Calculated output
contributionPerFteExTax = (revenue − direct labour − other variable cost) ÷ FTEWhere
- revenueExTax
- Ex-tax revenue (currency units on one consistent ex-tax basis)Source: Business record
- directLabourCostExTax
- Direct labour cost (currency units on one consistent ex-tax basis)Source: Business record
- otherVariableCostExTax
- Other variable cost (currency units on one consistent ex-tax basis)Source: Business record
- revenuePerFteExTax
- Revenue per FTE (money)Source: Calculated output
- contributionPerFteExTax
- Contribution per FTE (money)Source: Calculated output
labourCostRate = direct labour cost ÷ revenue, or zero when revenue is zeroWhere
- revenueExTax
- Ex-tax revenue (currency units on one consistent ex-tax basis)Source: Business record
- directLabourCostExTax
- Direct labour cost (currency units on one consistent ex-tax basis)Source: Business record
- labourCostRate
- Direct labour cost rate (percent)Source: Calculated output
Money inputs and outputs use the currency selected in the scenario without changing the canonical methodology. Rates, margins, utilisation and buffers are entered as percentages and converted to decimal values for calculation.
2. Worked example
Input assumptions
The worked values below come from the exact engine and the visible default assumptions.
- Ex-tax revenue
- 1,000,000 currency units/reporting period, ex tax
- Direct labour cost
- 400,000 currency units/reporting period, ex tax
- Other variable cost
- 100,000 currency units/reporting period, ex tax
- Full-time-equivalent headcount
- 10 full-time-equivalent people/reporting period
Calculation and outputs
Revenue per FTE
revenuePerFteExTax = revenue ÷ FTE- Ex-tax revenue
- 1,000,000 currency units/reporting period, ex tax
- Contribution per FTE
- 50,000 money
Engine result: 100,000 money
Contribution per FTE
contributionPerFteExTax = (revenue − direct labour − other variable cost) ÷ FTE- Ex-tax revenue
- 1,000,000 currency units/reporting period, ex tax
- Direct labour cost
- 400,000 currency units/reporting period, ex tax
- Other variable cost
- 100,000 currency units/reporting period, ex tax
- Revenue per FTE
- 100,000 money
- Direct labour cost rate
- 0.4 percent
Engine result: 50,000 money
Direct labour cost rate
labourCostRate = direct labour cost ÷ revenue, or zero when revenue is zero- Ex-tax revenue
- 1,000,000 currency units/reporting period, ex tax
- Direct labour cost
- 400,000 currency units/reporting period, ex tax
- Other variable cost
- 100,000 currency units/reporting period, ex tax
- Revenue per FTE
- 100,000 money
Engine result: 0.4 percent
Example
The worked values below come from the exact engine and the visible default assumptions.
- Revenue per FTE
- 100,000.00 currency units
- Contribution per FTE
- 50,000.00 currency units
- Direct labour cost rate
- 40%
The exact engine-derived outputs are shown in the labelled rows below.
Interpretation
Use the per-FTE results to compare your own staffing scenarios; they are not industry productivity benchmarks.
3. Validation and boundary checks
- FTE must be finite and strictly positive; fractional FTE remains valid.
- Revenue and costs must be finite and non-negative.
- Contribution may be negative; zero revenue returns a zero labour-cost rate.
- Ex-tax revenue minimum
revenueExTax ≥ 0 currency units/reporting period, ex tax— A lower value is rejected before calculation.- Ex-tax revenue maximum
revenueExTax ≤ 10,000,000 currency units/reporting period, ex tax— A higher value is rejected before calculation.- Direct labour cost minimum
directLabourCostExTax ≥ 0 currency units/reporting period, ex tax— A lower value is rejected before calculation.- Direct labour cost maximum
directLabourCostExTax ≤ 10,000,000 currency units/reporting period, ex tax— A higher value is rejected before calculation.- Other variable cost minimum
otherVariableCostExTax ≥ 0 currency units/reporting period, ex tax— A lower value is rejected before calculation.- Other variable cost maximum
otherVariableCostExTax ≤ 10,000,000 currency units/reporting period, ex tax— A higher value is rejected before calculation.- Full-time-equivalent headcount minimum
fullTimeEquivalentHeadcount ≥ 0 full-time-equivalent people/reporting period— A lower value is rejected before calculation.- Full-time-equivalent headcount maximum
fullTimeEquivalentHeadcount ≤ 100,000,000 full-time-equivalent people/reporting period— A higher value is rejected before calculation.
4. Assumptions and source classification
- FTE scope and cost allocation are user decisions.
- The ratio is compared only with the user’s own scenario, not an external benchmark.
This planner has no current policy-data dependency. Its commercial assumptions are user supplied. Registered family-level regression suites exercise the shared business-logic engine and worked-result reconciliation.
5. Limitations
- No productivity, wage, loading, on-cost or staffing benchmark is embedded.
- The model does not interpret awards, classify workers or establish compliance.
- It is educational decision support, not accounting, tax, legal or employment advice.
This is educational decision support, not tax, accounting, legal or financial advice. Check the treatment of your actual transactions under the rules that apply to your business and seek qualified advice where appropriate.
6. Update and evidence policy
Registered family-level suites test formula invariants and example reconciliation; the release ledger records that coverage without claiming a separate oracle for every line of public copy. There is no official threshold or benchmark to refresh for this planner. Commercial inputs remain user-supplied because they vary by business and contract.
Change history
- : Initial public release of the Revenue per Employee Scenario planner and methodology.
Related reading
Guides to interpret the decision and its assumptions.
- Revenue per Employee: What It Does and Does Not Tell You
Use revenue per employee as a scoped capacity indicator while keeping margin, labour mix and outsourcing boundaries visible.
Read guide - Unit Economics: Choose the Right Decision Boundary
Choose a repeatable object, economic boundary, constrained resource and horizon before selecting a calculation, without importing a benchmark or market default.
Read guide