What Portion of Revenue Should Go to Payroll? If you're wondering about how much money to put aside for payroll, read this.
By Joe Worth
Opinions expressed by Entrepreneur contributors are their own.
Q: Is there an ideal percentage of revenue that should go to payroll?
A: In my opinion, anyone who claims such a thing exists is full of it. Truth is, the figures vary widely among not only entire industries but also among the companies within them.
Some industries pay low wages but have high rates of employee turnover (fast food being the prime example). The low wages may be great for owners, but turnover usually results in high costs for acquiring and training replacements—expenses that need to be added to the total cost of payroll.
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