Cost Allocation by Headcount Calculator

About this calculator

Shared costs — rent, IT support, a shared HR team's salaries — rarely belong to one department, so businesses need a fair way to split them across cost centers. Allocation by headcount is one of the most common bases: each department's share of the total cost equals its share of total staff, i.e. (department headcount ÷ total headcount) × total cost. It's simple and defensible for costs that genuinely scale with people, like office space or a shared benefits administrator, though it's a poor fit for costs that scale with revenue or usage instead.

This calculator takes the total shared cost and each department's headcount and returns the allocated dollar amount for a chosen department. Finance and accounting teams building internal cost-allocation reports, department managers reviewing their charged-back overhead, and startup founders setting up cost-center budgeting for the first time use it to produce a transparent, headcount-based split that's easy to explain and audit.