The short answer
Personnel costs are the largest cost block in most companies. The most reliable way to plan them is role by role: with a start month, an FTE share, gross salary and a rate for on-costs. That gives you monthly cost, annual cost and headcount in full-time equivalents.
Excel template: Download the headcount and personnel cost plan as Excel. All figures in it are invented example values.
What the template contains
- One row per role with start month, end month (0 = runs through), gross salary at full time and FTE share.
- An adjustable on-cost rate as a percentage of gross.
- The cost per role for each of the twelve months.
- Total rows for personnel cost, headcount (full-time equivalents) and cumulative cost.
- The annual cost per role.
How the template calculates
The monthly cost of a role is gross salary times FTE share times one plus the on-cost rate, and only in the months between start and end. A role that starts in July costs nothing in January and the full amount from July. That sounds trivial, but it is the most common mistake in annual plans: spreading new hires evenly across the year plans costs too high at the start and too low at the end.
The on-cost rate
On top of gross pay come employer social security contributions and other on-costs, such as accident insurance contributions or allowances. The example value in the template is 21 percent. The actual rate depends on the individual case; your payroll provider can tell you the number that fits your company. Change the value in the yellow cell and the whole plan recalculates.
Example from the template
Invented example: A small team starts in January with two people and grows to seven full-time equivalents by September. Personnel costs rise from about 19,000 euros in January to about 53,000 euros per month from September, and annual costs come to about 502,000 euros. The plan immediately shows what an additional hire in autumn costs in the current year and what it would cost over twelve months in the following year. Those are two different numbers, and management needs both to decide.
Typical mistakes in personnel planning
- Forgetting on-costs. Gross salary is not what the role costs the company.
- Start month too optimistic. Between the decision, the search and the new hire's notice period there are often several months.
- One-off costs left out. Recruiting, equipment and onboarding come on top. The template deliberately excludes them; you can add them in a row of your own.
- Part time not reflected. An FTE share of 0.5 halves the cost, but not automatically the effort for management and coordination.
- Plan and actual drift apart. Without regular reconciliation with payroll, the plan is out of date after a few months.
How to use the template
Enter the existing roles first, then the planned ones. Check the monthly total against your budget and your liquidity: how personnel costs affect how long your cash lasts is shown in How to calculate your runway. The comparison with the actual development works with the budget versus actual variance template.
Frequently asked questions
What is a full-time equivalent?
A full-time equivalent converts part-time roles to full time. Two people each working half time make one full-time equivalent. That makes headcount and cost comparable in planning.
How high are personnel on-costs?
That depends on the individual case, for example on salary, insurance and voluntary benefits. The template uses an example value of 21 percent, which you should replace with the rate from your payroll provider.
How do I plan a role that ends later?
Enter the month number in the end month column in which the role last causes costs. The value 0 means the role runs through.
Read next
How to plan liquidity in the short term is covered in the 13-week cash flow forecast. Support with planning and controlling is described on the interim accounting and FP&A page. The template does not replace tax, legal or payroll advice.
