Quick answer: Employee turnover rate = separations during the period ÷ average number of employees × 100. Average headcount is (employees at the start + employees at the end) ÷ 2. A company with 190 staff on January 1, 210 on December 31 and 18 leavers during the year has (18 ÷ 200) × 100 = 9% annual turnover.
The turnover rate formula
turnover rate = separations ÷ average headcount × 100Average headcount = (start + end) ÷ 2, or the average of monthly headcounts.Calculate turnover
Turnover rate
9%
Monthly and annual turnover
Calculate monthly turnover with that month’s separations and average headcount. For an annual figure, either add the 12 monthly rates or divide total annual separations by the average of the 12 monthly headcounts. The second method is more accurate when headcount changes a lot during the year.
Annualizing a quarter
- Q1: 12 separations, average headcount 150.
- Quarterly turnover: 12 ÷ 150 × 100 = 8%.
- Rough annual projection: 8% × 4 = 32%, if the pace continues.
Result: 8% for the quarter, about 32% a year
What counts as a separation
| Include | Usually exclude or report separately |
|---|---|
| Resignations (voluntary turnover) | Internal transfers and promotions |
| Dismissals and layoffs (involuntary turnover) | Employees on leave who are still employed |
| Retirements | Seasonal staff you track as a separate group |
| Deaths and disability separations | Contractors and agency workers |
Report voluntary and involuntary turnover separately: a rise in resignations points to pay, management or workload issues, while layoffs reflect business decisions.
Turnover benchmarks by industry
Monthly total separation rates from the US Bureau of Labor Statistics JOLTS survey, January 2026 preliminary data, with a simple × 12 annual approximation. JOLTS rates are per 100 employees and include all separations.
| Industry | Monthly separations rate | Approximate annual |
|---|---|---|
| Leisure and hospitality | 5.4% | ~65% |
| Accommodation and food services | 5.2% | ~62% |
| Professional and business services | 4.6% | ~55% |
| Construction | 3.6% | ~43% |
| Retail trade | 3.5% | ~42% |
| Health care and social assistance | 2.6% | ~31% |
| Manufacturing | 2.5% | ~30% |
| Financial activities | 2.1% | ~25% |
| Government | 1.2% | ~14% |
Benchmarking: Your own trend matters more than an industry average. Compare the same period year on year, and by team, role and tenure.
Retention rate is not the opposite of turnover
Retention rate measures how many of the people employed at the start are still there at the end: (employees at start who remain ÷ employees at start) × 100. A company that hires and loses many new starters in the same year can have high turnover and still a high retention rate for its original staff.
What turnover costs
Replacing an employee means recruiting, onboarding, training and lost productivity while the role is empty or the new hire gets up to speed. Many HR studies put the cost at a large fraction of annual salary, higher for specialist and senior roles. Estimate your own cost per hire from job ads, agency fees, interview hours and training time rather than relying on a single rule of thumb.
Excel formula
// Start headcount in B2, end in C2, separations in D2
=D2/((B2+C2)/2)
// Format as PercentageFrequently asked questions
How do you calculate employee turnover rate?
Divide the number of separations by the average number of employees and multiply by 100. 18 leavers with an average of 200 staff is 9%.
How do I calculate average number of employees?
Add the headcount at the start and end of the period and divide by 2, or average the monthly headcounts for more accuracy.
What is a good employee turnover rate?
It depends on the industry. Government and finance run far lower than hospitality or retail. Compare against your own history and your sector.
Do internal transfers count as turnover?
Usually not. Count only people who leave the organization, and report transfers separately.
What is the difference between turnover and attrition?
Turnover counts all separations, usually followed by replacement hiring. Attrition often refers to roles that are not refilled.
How do I annualize monthly turnover?
Add the 12 monthly rates, or divide total separations for the year by the average headcount across the year.
Keep going
Benchmarks are BLS JOLTS preliminary figures as reported in early 2026 and are approximations when annualized. Use them for orientation, not as targets.
Content Lead, Anchor AI Tools, California, USA. Spotted an error? Email hello@anchoraitools.com and it will be checked and corrected. See our editorial standards.