The cost of an employee
What an employee costs the business is more than the salary agreed. It includes the employer's contributions, benefits and the costs that come with having someone on the team.
Cost of an employee = Gross pay + Employer contributions + Benefits + Related costs
Why it matters
A budget built on salaries alone is short of the real cost. Seeing the whole cost is what makes a hiring decision honest.
Where it appears in a CFO+ model
- In the team and salaries section, which every model asks.
- In the operating costs shown in the income statement.
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Activities where it shows up
This concept belongs to a section that every CFO+ model asks, whatever the activity.
No figures are published: a definition and a formula only.