Estimate the annual workforce cost of employee absences using paid time, coverage premiums, and case administration. The result separates direct paid absence cost from operational add-ons so HR and finance teams can see which assumptions drive the total.
Annual cost = employees × absence days × daily cost × (1 + coverage premium) + administration cost
The total combines paid absent time, an adjustable premium for replacement coverage, and annual program administration. It is a planning estimate rather than an accounting standard.
Do not add a coverage premium if replacement labor is already fully included in the loaded daily cost.
For 250 employees averaging 6.5 days, a $320 daily cost, 25% coverage premium, and $18,000 administration, estimated annual cost is $668,000.
Only if you assign them a daily cost. Use a lower direct cost but include operational coverage where appropriate.
Convert hours to day equivalents using your standard workday and include them in the average days figure.
Include the annual internal or vendor cost of case handling that is not already embedded in labor or coverage inputs.
Yes. For example, agency staffing and overtime can together cost more than the absent employee’s normal daily labor cost.
No. The result covers the cost inputs shown; add revenue effects separately only when you have a defensible model.
| Output | How to use it |
|---|---|
| Estimated annual absence cost | Primary planning estimate |
| Direct absent-time cost | Supporting decision metric |
| Coverage premium cost | Supporting decision metric |
| Annual cost per employee | Supporting decision metric |