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Payroll cost ratio

Payroll cost ratio is your total staff cost as a percentage of revenue — usually the largest single cost a small hotel has.

Formula

Payroll ratio = total payroll ÷ total revenue × 100

Worked example

  1. A resort pays ₱5,040,000 in salaries over a year on ₱19,971,823 of revenue.
  2. ₱5,040,000 ÷ ₱19,971,823 × 100 = 25.2%.

Why it matters

For a Philippine property with a restaurant, somewhere in the mid-twenties to low thirties is normal. Far below it usually means you are understaffed and your reviews will say so; far above it means the roster is carrying the season rather than the season carrying the roster.

It is the ratio to check before hiring, because a new full-time role is a permanent claim on revenue you have not earned yet.

The ratio also tells you when to hire part-time rather than full-time. A property whose payroll ratio is fine in December and painful in September has a seasonality problem, not a staffing one, and the fix is a roster that flexes rather than a headcount that does not.

In MangoHost

Payroll is its own KPI beside expenses rather than buried inside them, precisely because it is the number worth watching separately.

Expenses & payroll →

Related terms

  • Net profit marginNet profit margin is the share of your total revenue you actually keep after every cost — including salaries.
  • Cost per occupied room (CPOR)CPOR is what it costs you to service one sold room-night — housekeeping labour, linen, amenities, utilities.

MangoHost gives Philippine properties these numbers without a month-end spreadsheet. Book a 30-minute walkthrough and see them on your own rooms.