Calculating Turnover Rate by Month

To calculate your monthly turnover rate, divide the number of employees who left during the month by the average number of employees on payroll for that month, then multiply by 100. For example, if 3 employees left and you averaged 50 employees, your monthly turnover rate is 6%.

Formula

Monthly turnover rate (%) = (Number of separations during the month ÷ Average number of employees during the month) × 100

Where:

• Number of separations = all employees who left the organization during that month (resignations, terminations, retirements, layoffs, etc.)
• Average number of employees = (employees at start of month + employees at end of month) ÷ 2, or the sum of daily headcounts divided by the number of days in the month

The result is expressed as a percentage. A rate of 5% means that, on average, 5 out of every 100 employees left during that month.

Worked Example

Using the default values from the calculator: 3 employees left during the month, and the average headcount was 50.

1. Divide separations by average headcount: 3 ÷ 50 = 0.06
2. Multiply by 100 to get a percentage: 0.06 × 100 = 6%

So the monthly turnover rate is 6%. This matches the calculator output.

Why Monthly Turnover Matters

Monthly turnover gives you a more timely snapshot than annual turnover. HR teams and managers use it to spot sudden spikes—like a wave of resignations after a policy change or a seasonal surge in retail. Annual turnover can hide those patterns, because a bad month gets averaged out over twelve months. Tracking monthly helps you respond faster: if you see a jump, you can investigate exit interviews, engagement surveys, or compensation issues before the problem grows.

Monthly rates are also useful for comparing departments or locations. One team might have a 2% monthly rate while another has 8%, which points to a specific management or workload issue rather than a company-wide trend.

How to Get the Numbers Right

The most common challenge is defining “average employees.” The simple midpoint method works well when headcount changes gradually:

• Average employees = (beginning headcount + ending headcount) ÷ 2

If your company grows or shrinks a lot within a month, use a daily average instead: add up the headcount for each day and divide by the number of days in the month. This is more accurate but requires daily data.

You also need to decide who counts as a “separation.” Include voluntary resignations, involuntary terminations, retirements, and layoffs. Do not include internal transfers or promotions—those employees stay with the company. If you want to focus on avoidable turnover, you might exclude layoffs and retirements and report “voluntary turnover” separately.

Common Mistakes and How to Avoid Them

• Using ending headcount instead of average. This overstates turnover when headcount is falling and understates it when headcount is rising.
• Mixing time periods. If you count separations over a month, use that same month’s average headcount—not the annual average.
• Forgetting to multiply by 100. A rate of 0.06 is not 6%—it’s 6% only after you multiply by 100.
• Including contractors or temps. Only count employees on your payroll, unless you deliberately want a broader “total workforce” turnover.
• Rounding too early. If you round the division to two decimals before multiplying, you might get 6.0% instead of 5.9%—not a big deal, but be consistent.

How to Interpret Your Monthly Rate

A “good” turnover rate varies widely by industry. For example, retail and hospitality often run higher (10–15% monthly is not unusual), while professional services or government might be 1–2% monthly. Instead of comparing to a generic benchmark, compare your rate to your own historical average and to industry-specific data if you have it.

Also consider the context. A spike in December might be seasonal (holiday jobs ending) rather than a red flag. A spike right after annual reviews might indicate dissatisfaction with raises. Look at the reasons for departure, not just the number.

One month is a short window—it can fluctuate due to small numbers. If you have 10 employees and one leaves, that’s 10% for the month, but it may not mean a real problem. That’s why many HR teams track a rolling three-month or six-month average to smooth out noise.

Limits of the Monthly Turnover Formula

The formula gives a simple ratio but doesn’t tell you why people leave or whether the departures are healthy. For instance, a 5% monthly rate could be entirely due to retiring long-tenured employees (natural attrition) or entirely due to new hires quitting within a month (a hiring or onboarding problem). The formula treats both the same.

It also ignores the quality of the workforce. Losing a top performer is more costly than losing a low performer, but the turnover rate doesn’t reflect that. For deeper analysis, look at turnover by tenure, by performance rating, or by department.

Finally, the formula assumes you have accurate headcount data. If your records are incomplete, your average will be off, and the rate will be misleading.

Frequently Asked Questions

What is the difference between turnover rate and attrition rate?

Turnover includes all separations—voluntary and involuntary. Attrition usually refers only to positions that are not replaced, so it’s a subset of turnover. In practice, many people use the terms interchangeably, but if you want to be precise, decide which definition you’re using and stick to it.

Should I include layoffs in the monthly turnover rate?

It depends on your goal. For overall turnover, yes—include all separations. For “regrettable turnover” or “voluntary turnover,” exclude layoffs and retirements. Many HR teams report both overall and voluntary turnover to get a fuller picture.

How do I calculate annual turnover from monthly rates?

You can average the 12 monthly rates, but that’s not exactly the same as the annual rate. To get the true annual rate, divide the total separations for the year by the average headcount for the year, then multiply by 100. The average of monthly rates is usually close, but it can differ if headcount changed significantly during the year.

What is a normal monthly turnover rate?

There’s no universal normal. The U.S. Bureau of Labor Statistics reports total separations rates for various industries; for example, retail trade often sees monthly rates around 4–5%, while government is closer to 1%. Check industry-specific data for your sector rather than relying on a generic number.

Can I use this formula for a department or team?

Yes, the same formula works for any group. Just use the department’s separations and average headcount. Be aware that small teams produce volatile rates—a single departure in a 5-person team is 20% for that month, which may not be meaningful.

What if I don’t have the average headcount, only the start and end counts?

Use the midpoint formula: (start + end) ÷ 2. It’s a reasonable estimate for most months. If your company is growing or shrinking rapidly, try to get daily headcount data for a more accurate average.

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in t | Employees who left in month | count | 3 | 0
in d | Average employees during month | count | 50 | 1
out rate | Monthly turnover rate | % | (t / d) * 100 | 1