Attrition Rate Formula: How to Calculate It with Example

Attrition rate is the percentage of employees who left the organization during a period, measured against the average number of employees on the rolls in that period. It counts every separation, from resignations and terminations to retirements and the end of fixed-term contracts, unless you choose to report voluntary and involuntary exits separately.

Formula

Attrition rate (%) = Employees who left in the period / Average headcount in the period x 100

Term	Meaning
Employees who left	Everyone whose last working day fell inside the period, whatever the reason. Count people, not exit forms or resignation letters.
Average headcount	(Headcount on the first day + Headcount on the last day) / 2. For a full year with big swings, use the average of the 12 month-end headcounts.
Period	The month, quarter or financial year being measured. Both numbers must cover the same period.

Worked example

A software services company in Pune had 480 employees on 1 April 2025 and 520 on 31 March 2026. During the financial year, 96 people had their last working day: 71 resigned, 14 were terminated or not confirmed, 6 fixed-term contracts ended and 5 employees retired.

Average headcount = (480 + 520) / 2 = 1,000 / 2 = 500
Employees who left = 71 + 14 + 6 + 5 = 96
Attrition rate = 96 / 500 x 100 = 19.2%
Monthly view: 96 / 12 = 8 exits a month, and 8 / 500 x 100 = 1.6% a month
Voluntary part only: 71 / 500 x 100 = 14.2%

Result: Attrition for FY 2025-26 is 19.2 percent. Resignations alone account for 14.2 percent, which is the part managers can influence most directly.

Reading your attrition rate against your own history

No single attrition figure is healthy for every company. A restaurant chain, a hospital and a software firm lose people for different reasons and at different speeds. The useful comparison is with yourself: the same quarter last year, a rolling 12-month figure, and one department or branch against another. When one team rises by a few points while the company figure stays flat, the cause is usually a manager, a roster or a workload problem rather than the job market.

If you compare with other companies, first check that they use the same formula. Some divide by opening headcount, some leave out trainees or fixed-term staff, and some publish only voluntary exits. Two numbers built on different rules cannot be compared, however similar they look.

Monthly, quarterly and annual attrition

Monthly attrition is the month's exits divided by the month's average headcount. It reacts quickly, which makes it good for spotting trouble, but one bad month can mislead. To express a monthly figure as a yearly rate, multiply by 12 and label it as annualized. For the year itself, divide the year's exits by the year's average headcount, using the average of 12 month-end counts when the company grew or shrank a lot during the year.

Voluntary attrition: resignations and absconding only.
Involuntary attrition: terminations, non-confirmation and retrenchment decided by the company.
Attrition by tenure: exits in the first year compared with longer-serving staff.
Attrition by department, location, grade and reporting manager.

Counting mistakes that distort attrition

Most wrong attrition numbers come from inconsistent counting, not from bad arithmetic. Agree the rules once with finance and the department heads, write them into your HR reporting note, and apply them every month. A trend is only meaningful when January and December were counted the same way.

Using the resignation date instead of the last working day, which moves exits into the wrong month.
Leaving out people who joined and left within the same period.
Dividing by closing headcount in a year of fast hiring, which makes attrition look lower.
Mixing contract labour on a contractor's rolls into your own exits.
Treating a transfer between group companies as an exit.

How to improve it

Read exit reasons every month by manager and department, and act on the top two reasons instead of the whole list.
Hold stay conversations with strong performers before the appraisal cycle, when many resignation decisions are made.
Fix the first 90 days: an organized joining day, a named buddy and manager check-ins at 30, 60 and 90 days.
Compare pay with the market for roles where exits cluster, and correct outliers before the next increment cycle.
Track attrition by reporting manager and coach managers whose teams lose people faster than the rest of the company.
Advertise openings internally first so people can change roles without leaving.

Tracking it in ZeniaHR

Headcount and exits come from employee records in ZeniaHR. The active and previous employee lists give opening and closing headcount, and resignation recording sets the last working day, so each exit lands in the right month. Offboarding records a structured exit reason for every leaver, which lets you split voluntary and involuntary exits. There is no single attrition report, so take the leavers from the previous employee list and calculate.

See it on your own data

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Frequently asked questions

How do you calculate attrition rate monthly?

Divide the number of employees whose last working day fell in the month by the month's average headcount, then multiply by 100. Take average headcount as the month's opening and closing counts added together and halved. For example, 6 exits against an average headcount of 300 gives 6 / 300 x 100 = 2 percent for the month.

Is attrition rate the same as turnover rate?

In most Indian companies the two terms describe the same number: exits divided by average headcount. Some organizations draw a line, using turnover for exits that are replaced and attrition for positions left unfilled. What matters is that your formula is written down and applied the same way every month, so trends and team comparisons stay fair.

Should employees who resign during probation be counted in attrition?

Yes. A person who joins and leaves within the same period is still an exit and belongs in the count. Leaving them out hides early attrition, which is often the easiest kind to fix. Many companies also report these exits separately as early attrition, so the cost of poor hiring or onboarding is visible on its own.

What is a good attrition rate for a company in India?

There is no universal good figure, because attrition depends on the industry, the city, the role mix and how fast the company is growing. A better test is direction and spread: is your rate lower than in the same period last year, and are a few teams or managers far above the company figure? Close those gaps first.