- Pick a display period (annual, quarterly, or monthly) for reporting.
- Enter your current headcount and average salary for the role set.
- Add planned hires, their start month, and an estimated ramp period.
- Set working days, hours per day, utilization, and absence rate.
- Include turnover rate and vacancy days to model backfill loss.
- Add benefits and overhead rates to convert payroll into total cost.
- Optionally include contractor and overtime hours with hourly rates.
- Enter demand hours to estimate required FTE and the gap.
- Click Calculate, then export the summary as CSV or PDF.
| Metric | Computation | Notes |
|---|---|---|
| Gross hours per FTE | WorkingDays × HoursPerDay | Annualized working time. |
| Productive hours per FTE | GrossHours × Utilization × (1 − AbsenceRate) | Expected usable hours. |
| Turnover vacancy loss | HC × TurnoverRate × (VacancyDays / WorkingDays) × GrossHours | Backfill time reduces capacity. |
| Hire payroll (prorated) | Hires × AvgSalary × (MonthsEmployed / 12) | MonthsEmployed = 13 − StartMonth. |
| Hire capacity weight | HirePayWeight − 0.5 × (RampMonths / 12) | Simple ramp approximation. |
| Total capacity hours | (HC × ProdHours) − TurnoverLoss + (Hires × ProdHours × HireCapWeight) + ContractorHours + OvertimeHours | Never below zero. |
| Total budget | Payroll + (Payroll × BenefitsRate) + (Payroll × OverheadRate) + ContractorCost + OvertimeCost | Payroll includes prorated hires. |
| Cost per capacity hour | TotalAnnualBudget / AnnualCapacityHours | Uses annual baseline. |
| Required FTE | DemandHours / ProductiveHoursPerFTE | Assumes same productivity level. |
| Input | Example Value | Why it matters |
|---|---|---|
| Current headcount | 50 | Baseline capacity and payroll. |
| Planned hires | 5 | Growth and workload coverage. |
| Average salary | 65,000 | Main driver of payroll and adders. |
| Utilization | 75% | Time available for productive work. |
| Absence rate | 6% | Reduces usable hours. |
| Turnover rate | 10% | Backfill downtime affects capacity. |
| Vacancy days | 30 | Average time to fill roles. |
| Benefits rate | 20% | Transforms payroll into total compensation cost. |
| Overhead rate | 12% | Allocates shared costs fairly. |
| Demand hours | 78,000 | Used to estimate required FTE. |
| Contractor hours | 1,200 | Short-term capacity boost. |
| Overtime hours | 400 | Temporary surge capacity. |
Capacity hours translate headcount into usable output
A 50 FTE team with 230 working days and 8 hours daily has 92,000 gross hours. At 75% utilization and 6% absence, productive hours per FTE are 1,296.0, giving 64,800 hours before turnover effects. If utilization drops to 65%, capacity falls to 56,160 hours.
Turnover and vacancy days quietly remove deliverable time
If turnover is 10% and average vacancy is 30 days, capacity loss is approximated as HC × turnover × (vacancy/working days) × gross hours. With the example inputs, that is about 6,000 hours annually, similar to 4.6 fully productive FTE-months. Reducing vacancy from 30 to 20 days recovers about 2,000 hours.
Hiring timing changes both spend and capacity
A hire starting in April works 9 months in the year, so payroll is prorated to 75%. If ramp to full productivity is 2 months, the model subtracts a 0.5 ramp factor, yielding an effective capacity weight near 66.7% for that year. Five hires at 65,000 add 243,750 payroll but contribute about 4.4 FTE-equivalents of capacity.
Benefits and overhead convert payroll into an approval-ready budget
Budget reviews usually require fully loaded costs. With 20% benefits and 12% overhead, every 100 in payroll becomes 132 in total cost, before contractors and overtime. On a 3.5 million payroll plan, that adds 1.12 million in adders. Tracking these rates separately explains why similar salaries can produce different totals.
Flexible hours help close shortfalls without permanent headcount
Contractor and overtime hours add capacity directly and can be priced with hourly rates. For example, 1,200 contractor hours at 85 and 400 overtime hours at 60 add 126,000 in cost while providing 1,600 incremental hours. At 1,296 productive hours per FTE, that equals 1.23 FTE of annual capacity.
Cost per capacity hour supports productivity and chargeback decisions
Total annual budget divided by annual capacity hours yields a comparable unit cost. When unit cost rises, the driver is usually lower utilization, higher absence, extended vacancy days, or a shift toward premium flexible labor. If total budget is 4.7 million and capacity is 66,000 hours, unit cost is 71.21 per hour. Teams can use this metric to set internal rates, estimate project cost, and validate staffing requests during quarterly planning cycles.