Employee Turnover Rate Formula (With 2025 BLS Benchmarks)
Key takeaway
How to calculate employee turnover rate monthly and annually, with worked examples, the retention rate formula and 2025 BLS benchmarks.
The employee turnover rate formula is: (number of separations ÷ average number of employees) × 100. For a month, average employees = (headcount at the start + headcount at the end) ÷ 2. For a year, add up the 12 monthly separation counts and divide by the average of the 12 monthly headcounts. Example: 45 people left during the year and average headcount was 210, so annual turnover is 45 ÷ 210 × 100 = 21.4%. Below: the monthly and annual versions, voluntary vs involuntary splits, the retention rate formula, and 2025 BLS benchmarks by industry.
The turnover rate formula, step by step
- 1Pick the period: a month, a quarter or a year. Use the same one every time you compare.
- 2Count separations: every employee who left the payroll during the period. That means resignations, terminations, layoffs, retirements and deaths. Leave out internal transfers and promotions.
- 3Work out average headcount: (start + end) ÷ 2 for a month. For longer periods, average the month-end headcounts. This is more accurate than start + end when headcount moved during the year.
- 4Divide and multiply by 100: separations ÷ average headcount × 100.
Monthly turnover example
| Input | Value |
|---|---|
| Headcount on March 1 | 180 |
| Headcount on March 31 | 190 |
| Average headcount | (180 + 190) ÷ 2 = 185 |
| Separations in March | 4 |
| Monthly turnover rate | 4 ÷ 185 × 100 = 2.16% |
Annual turnover example
Add up the separations from all 12 months: 45 in total. Average the 12 month-end headcounts: 210. Annual turnover = 45 ÷ 210 × 100 = 21.4%.
Don't compute annual turnover as start headcount + end headcount ÷ 2 if the company grew or shrank a lot during the year. A team that went from 100 to 300 people had an average close to 200 only if it grew evenly. Monthly averages handle uneven growth.
Annualizing a partial year
To estimate a full-year rate part-way through the year: (year-to-date separations ÷ average headcount so far) × (12 ÷ months elapsed). With 18 separations and an average of 200 employees after 6 months: 18 ÷ 200 × 2 = 18% annualized. Seasonal businesses should compare against the same months last year instead, because a straight-line estimate overstates turnover after a busy season.
Voluntary, involuntary and first-year turnover
The overall rate hides what is going on. Split it with the same denominator:
| Rate | Separations counted | What it tells you |
|---|---|---|
| Voluntary turnover | Resignations and retirements | How many people choose to leave. Most retention work targets this |
| Involuntary turnover | Terminations for cause, performance exits, layoffs | Hiring quality, performance management and restructuring |
| Regrettable turnover | Voluntary exits you would have tried to keep (you decide the list) | The losses that actually hurt |
| First-year turnover | Separations of people hired in the last 12 months ÷ hires in that period | Whether recruiting and onboarding work |
The voluntary and involuntary rates add up to the total rate because they share the denominator. First-year turnover uses hires as the denominator, so it doesn't add to anything else.
Employee retention rate formula
Retention rate = (employees at the end of the period who were also there at the start ÷ headcount at the start) × 100. New hires during the period are ignored.
Example: 200 employees on January 1. On December 31, 170 of those same people are still employed. Retention is 170 ÷ 200 = 85%.
2025 turnover benchmarks by industry (BLS)
The Bureau of Labor Statistics' Job Openings and Labor Turnover Survey (BLS JOLTS) is the most reliable public benchmark. It reports rates as the average monthly share of employment. Multiply by 12 for a rough annual figure.
| Industry | Total separations, monthly avg 2025 | Quits, monthly avg 2025 | Rough annual total separations |
|---|---|---|---|
| All nonfarm | 3.3% | 2.0% | ~40% |
| Total private | 3.6% | 2.2% | ~43% |
| Accommodation and food services | 5.5% | 4.2% | ~66% |
| Professional and business services | 4.6% | 2.3% | ~55% |
| Construction | 4.0% | 1.8% | ~48% |
| Retail trade | 3.8% | 2.6% | ~46% |
| Health care and social assistance | 2.9% | 2.0% | ~35% |
| Information | 2.8% | 1.3% | ~34% |
| Manufacturing | 2.4% | 1.4% | ~29% |
| Finance and insurance | 2.1% | 1.3% | ~25% |
| Government | 1.5% | 0.8% | ~18% |
Sources: total separations from BLS JOLTS Table 20; quits from BLS JOLTS Table 22. Both are annual averages, not seasonally adjusted. The annual column is our multiplication of the monthly rate by 12, not a BLS figure.
BLS counts every separation, including retirements, deaths and transfers between locations of the same company. Its rates are therefore a little higher than a company's own voluntary turnover. Compare quits with your voluntary rate, and total separations with your total rate.
Mistakes that distort the number
- Counting internal transfers or promotions as separations
- Using end-of-period headcount as the denominator. Fast-growing teams will look better than they are
- Mixing contractors, interns and seasonal staff into the same rate as permanent employees. Report them separately
- Comparing a monthly rate with someone else's annual rate
- Treating a rehire as neither a separation nor a hire. If the person left the payroll, count both
- Reporting a small team's rate without the raw numbers. For a 12-person team, one departure is 8%
What to do with the number
Track the rate monthly by department, manager, tenure band and role, and look at the split before the total. A company-wide rate of 15% can hide one team at 40%. For the causes, use exit and stay interviews and compare against our employee retention strategies. For the other people metrics worth tracking next to turnover, see HR KPIs and metrics. Short definitions are in our glossary entries for turnover rate and attrition.
Frequently asked questions
What is the formula for employee turnover rate?
Separations during the period ÷ average number of employees in the period × 100. Average employees is (start headcount + end headcount) ÷ 2 for a month, or the average of monthly headcounts for a year.
How do you calculate annual turnover rate?
Add the separations from all 12 months and divide by the average of the 12 monthly headcounts, then multiply by 100. For example, 45 separations ÷ 210 average employees = 21.4%.
What is a good employee turnover rate?
It depends on the industry. In 2025, BLS data put the average monthly separations rate at 3.3% for all nonfarm jobs (roughly 40% a year), from 1.5% a month in government to 5.5% in accommodation and food services. Compare yourself with your own industry and your own trend.
Do retirements count in turnover?
Yes, in the total rate, since the employee left the payroll. Many companies report them within voluntary turnover or as a separate line so they don't hide resignations.
Is retention rate the opposite of turnover rate?
No. Retention tracks only the employees you had at the start of the period. Turnover counts every departure, including people hired and lost within the period. The two numbers rarely add to 100%.
Should I include part-time and seasonal employees?
Include part-time employees in the main rate. Report seasonal, temporary and intern exits separately, because planned end dates inflate the rate without signalling a problem.
About the author
Editorial Lead, Software Evaluation
Rajat leads software evaluation at PeopleOpsClub and does the primary hands-on review work behind its software profiles, pricing breakdowns and head-to-head comparisons. He previously built and ran SpotSaaS (spotsaas.com) and Revoyant (revoyant.com), two software research and review platforms, and has spent that time working through HR and people operations products directly — signing up for trials, configuring admin settings, mapping how pricing actually scales and testing how support behaves — rather than relying on vendor collateral or aggregated review scores.
Fact-checked by Chandrasmita, Fact Checker.
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