Employee turnover rate formula: monthly, annual and voluntary turnover, with a worked example

Employee turnover rate is the number of employees who separated during a period divided by the average number of employees in that period, times 100. For a year: total separations in the twelve months ÷ the average of the twelve monthly headcounts × 100. Split separations into quits, layoffs and discharges, and other separations, using the definitions the U.S. Bureau of Labor Statistics uses in its Job Openings and Labor Turnover Survey (JOLTS), and add a regrettable-turnover line for leavers you wanted to keep. For context, JOLTS reported a monthly total separations rate of 3.2 percent for all nonfarm employers in August 2026.

This page covers the whole workforce. For the share of new hires who leave within a year, which says more about hiring quality, see first-year attrition rate.

What counts as a separation?

The JOLTS definitions are a sound starting point because they are public and stable. JOLTS counts separations as all employees separated from the payroll during the month, in three groups:

Inside one company, decide and write down three more rules: internal moves between teams are not separations; contractors and agency temps are excluded unless they are on your payroll; and part-time employees count as people, not as fractions of a full-time equivalent, unless you report both.

The formulas

Average headcount (month)  = (headcount at start of month + headcount at end) ÷ 2
Monthly turnover           = separations in the month ÷ average headcount × 100
Annual turnover            = separations in 12 months ÷ average of the 12 monthly headcounts × 100
Voluntary turnover         = quits ÷ average headcount × 100
Involuntary turnover       = layoffs and discharges ÷ average headcount × 100
Regrettable turnover       = regrettable leavers ÷ average headcount × 100

Use average headcount, not the headcount on the last day. A company that hired heavily in the final month would otherwise look as if its turnover fell.

Worked example: one year

Multiplying March by twelve would give 20.6%, well above the real annual 16.5%, because March was a heavier month than average. Annualize from twelve months of data, or say clearly that a figure is a monthly rate.

How do you compare your rate with BLS JOLTS?

JOLTS publishes monthly rates by industry. According to the BLS technical note, the separations rate is the number of separations divided by employment, multiplied by 100, where employment is people on the payroll for the pay period that includes the 12th of the month. Its annual figures need care:

• Annual levels are the sum of the 12 monthly levels, so annual separations compare directly with your own count.
• Annual average rates are the sum of the 12 monthly separation levels divided by the sum of the 12 monthly employment levels. That is an average monthly rate. To compare it with an annual turnover rate calculated as on this page, multiply it by 12.

The latest national release, for August 2026 (published September 29, 2026), reported for all nonfarm employers a total separations rate of 3.2 percent, a quits rate of 1.9 percent and a layoffs and discharges rate of 1.0 percent, with 363,000 other separations (BLS JOLTS news release). Industry rates differ widely, so use the JOLTS industry tables for your sector and compare monthly with monthly.

What do voluntary, involuntary and regrettable turnover tell you?

• Voluntary turnover reflects pay, managers, workload and the outside job market. Rising quits in one team usually point to something local; rising quits everywhere may be the market.
• Involuntary turnover reflects hiring quality and performance management, plus restructuring. A high dismissal rate among people hired in the last year is a recruiting problem; see how to avoid a bad hire.
• Regrettable turnover is the number leadership cares about most: people you wanted to keep. Define it by a rule set before people leave, such as performance at or above expectations and the manager would rehire, so it cannot be redefined afterwards. A rehire eligibility policy gives you that rule.

Exit interviews explain the why behind the voluntary numbers; see exit interview questions and how to analyze exit interview data.

How is turnover different from retention and first-year attrition?

Retention is not simply 100 minus turnover: turnover counts people hired during the year who also left, and retention ignores them. Report whichever answers the question being asked, and name the formula.

How does turnover feed hiring forecasts?

Every separation you expect next year is a backfill the recruiting team will probably have to fill, on top of growth hires. Continuing the invented example:

Split the backfill estimate by team and month using each team's own turnover, because recruiter capacity is planned by role family and quarter, not company-wide. The workforce planning template and backfill request template take it from there.

How should you report turnover?

A single annual figure arrives too late to act on. Most teams report a trailing twelve-month rate, updated every month: separations in the last twelve months divided by the average headcount over those twelve months. It moves smoothly, it is never distorted by one seasonal month, and every monthly report is comparable with the last.

Customer support accounts for 33 of the 68 leavers. Two more cuts usually earn their place in the report:

• By tenure band (under one year, one to three years, over three years). Heavy turnover in the first year points at hiring and onboarding; later turnover points at pay, progression and management.
• By manager, with care. Small teams make individual rates noisy, so look at counts over two or three years before drawing conclusions about a person.

Common mistakes

• Using end-of-period headcount instead of the average.
• Counting internal transfers as separations.
• Annualizing one month by multiplying by twelve.
• Comparing an annual rate with a JOLTS annual average rate without multiplying the JOLTS figure by twelve.
• Reporting percentages for small teams. One leaver in a team of eight is 12.5%; show the counts.
• Reporting voluntary turnover only and calling it turnover.