How Do I Calculate Total and Average Salary Costs in My Organization?

Hi, can someone please help me to calculate the total salary cost, average salary cost, and average salary increase in an organization? I need the formulas.

Regards, Chetana

Chetna, the answers seem to be in your question itself, unless you are asking for the total cost to the company. The total salary cost would be the addition of all the salaries. The average cost would be the sum of the total salary divided by the number of people. You may want to create groups to be accurate, such as "developers," etc. The average increase would also follow the same average calculation pattern.

Hi Chetana,

Calculating Salary Costs and Increases

Q. Can someone please help me to calculate:
The total salary cost
Average salary cost
Average salary increase in an organization.
Need the formulas.....

A. It's simple mathematics, and let me explain it this way:

1. Total salary cost: Be clear to add all the components of the salary, both monthly and annual; this includes insurance premiums and PF contributions by the company, et al. Add up all this for all employees to give the total salary cost.

2. Average salary cost: Once you have the total salary cost, divide this by the number of employees. Use the department-wise/location-wise, function-wise costs to be compared/benchmarked with other locations/industry standards.

3. Average salary increase:
a. Calculate (This year's total salary - previous year's total salary)
b. Divide a by this year's total salary.
c. Multiply the product by 100.

Voila, you would get the answer! Hope this helps you.

Cheerio,
Rajat Joshi