Total Annual Salary
Total Annual Salary - HR Metric - calculation
What (Definition)
Total annual Salary is the sum of actual annual salaries of current employees. This is based on the annual salary agreed with the employee and not the salary paid to employee so far.
Why (Benefits)
Total Annual Salary is a good indicator of how much is spent on paying salaries to the employees in a company.
When analyzing the expenses of a company, payroll expenses are usually an important part. This will allow future planning for company including hiring decisions.
It is also common to segment this metric by Department or location to identify the salary distribution.
Total Annual Salary by Department
How (Calculation?)
Formula: Sum of Actual Annual Salaries of Employees
If we have a list of employees and their salaries, we can calculate the total salary.
Total Annual Salary Calculation with an Example
In the above example, we have salaries of 10 employees. We can just sum them up to arrive at total salary.
Related HR Metrics
Now, it’s your turn.
Do you calculate total salary in your organization? What method do you use? Please share your thoughts. I look forward to learning from you.