Absenteeism Cost Calculator

How it works

The absence rate is the share of scheduled workdays lost to unplanned absence: days lost divided by headcount × scheduled workdays per employee. Planned leave such as vacation is normally left out of both, so the rate measures unexpected time away.

Each absent day is costed three ways. The employer still pays the absent employee's loaded daily pay (wages plus payroll taxes and benefits) when the day is paid sick time. Covering the work, through overtime, a temporary worker or a colleague moved from other tasks, adds a coverage cost. And cover is rarely as productive as the regular employee, so some output is lost; here that loss is entered as a percent of loaded daily pay.

The total is days lost × (loaded daily pay + coverage cost + lost productivity), shown in total, per absent day and per employee.

Formula

available days    = headcount × scheduled workdays per employee
absence rate      = days lost ÷ available days
lost productivity = loaded daily pay × lost productivity %
cost per day      = loaded daily pay + coverage cost + lost productivity
total cost        = days lost × cost per day
cost per employee = total cost ÷ headcount

Example

AIHR's examples: a 10-person team with 20 scheduled workdays (200 available days) that loses 5 days has an absence rate of 2.5%; a 25-person department scheduled for 60 days (1,500) that loses 60 days, 4%; a 50-employee company at 260 days (13,000) that loses 390 days, 3%.

For the 50-employee company, at $300 of loaded daily pay, $150 of coverage per absent day and 20% lost productivity ($60), each absent day costs $510. The 390 days cost $117,000 in pay, $58,500 in coverage and $23,400 in lost productivity: $198,900 in all, or $3,978 per employee and 7.8 days lost per employee.

Assumptions and limitations

• Results are for informational and educational purposes and are not financial, legal, employment or business advice.
• Loaded daily pay is counted for every day lost, as for paid sick time; an unpaid absence carries no pay cost, so the pay figure overstates it.
• Coverage cost and the lost-productivity percent are inputs you supply; their defaults are illustrative, not measured figures. Indirect effects such as overtime fatigue, missed deadlines or customer loss are not modelled.
• Absence rate definitions vary: some count hours rather than days, or include partial-day absences. The Bureau of Labor Statistics' 'lost worktime rate' is hours absent as a percent of hours usually worked.

Frequently asked questions