How to Calculate Absenteeism Rate: Formula & Examples

Employee absenteeism, or the practice of continuously avoiding work without any valid reason, is seeing a consistent uptrend nowadays. In fact, the labor statistics from the Bureau of Labor Statistics (U.S. BLS) have shown that at least 5.4% of employees working in the management, professional, and other related fields and 7.7% of employees in the private sector have reported absenteeism in one way or another as of January 2025.

Companies should ideally learn how to calculate their absentee rate to give them an idea of how to create policies that can help boost employee morale and engagement. It can also provide more benefits for companies that can help them develop more in the long run.

Read on to learn more about absenteeism, some of the rules and regulations surrounding it, and how to address it for companies.

What is an absenteeism rate?

An absenteeism rate refers to the percentage companies calculate to know how many of their employees take unplanned leaves, which prompts productivity loss. It can be measured via different factors, like individually, by team, or by organization. The numbers provided by these factors can provide companies with the data that they need to make regulations that can ensure a better working environment for their employees.

The formula to calculate an absenteeism rate within a company, companies would need to get the specific number of absences within the month, divide it by the working days (which should be multiplied by the number of employees) in the month, and multiply it by 100.

For example, if there are 30 absences from a company with 50 employees within August, which has 21 days, the absence rate for the company would amount to 2.8%. This means that on average, 2.8% of the workforce is not present during the month of August. It’s important to note that the absence rate should always be presented as a percentage.

To put it into perspective, an acceptable absenteeism rate that companies should strive for 1.5%. Keep in mind that this formula is for a monthly rate - the annual absenteeism rate formula is entirely different, as it should account for every public holiday and company breaks in mind.

Absenteeism is usually caused by the lack of pay equity – thus, most companies can greatly lower their average absentee percentage by using a good pay equity tool. What’s more, a good tool can help salary match every employee within the company, ensuring better pay equity in the long run as well.

Absenteeism rate vs. turnover rate

Although both share the same formula, the turnover rate refers to the percentage of how many employees who leave the company. Keep in mind that the turnover rate includes resignations, terminations of contracts, and layoffs.

Also, consider that it’s generally accepted to have a bigger turnover rate than an absenteeism rate. This is because studies have shown that a 10% turnover rate is relatively good for companies, which is almost 10 times more than the healthy absenteeism rate.

Tracking absenteeism rates between multiple employees is also significantly easier to calculate versus the turnover rate, even with sick leave, loss of other family members, absent days, physical illness, unplanned absence due to personal reasons, and unexcused absences factored in.

Why do companies need to track their absenteeism rate?

Companies need to track attendance and their absence rate to give them a clear picture of what does and does not work for their company and create company policies around it. Disgruntled employees are more likely to call out for work, which can bloat absence data, which leads to a higher overall absence rate.

Although a higher salary usually equates to higher absenteeism rates, an unfair compensation strategy where employees aren’t paid at the same level as their peers not only lowers team morale but is also usually accounted for in absenteeism within the workforce.

What are laws surrounding absenteeism

Laws in the U.S. surrounding absenteeism mainly have to do with the FMLA (Family and Medical Leave Act), which is applicable to every single U.S. workforce. This includes everyone from schools, public agencies, and private employees.

The FMLA states that all eligible employees are entitled to 12 unpaid workweeks in a year. It also requires employers to maintain their employees’ health benefits in these unpaid workweeks as if the employee were still currently at work. It should also be noted that per FMLA regulations, employees are entitled to return to work after the 12 unpaid workweeks are done.

How to calculate absenteeism rate

Below are the steps that companies can follow to properly calculate their absenteeism rate.

1. Step 1: Acquire the number of absent days within a month.

   To calculate it for companies, they should count how many times every employee called out of work for the month. Everything, from sick days, vacation leaves, leaves for underlying causes like personal issues, emergency family leaves, and other legitimate reasons to miss work, should be counted towards this count.

   If every employee had perfect attendance, then it's okay to skip this step.

2. Step 2: Count the number of workdays within the month

   For this step, it’s important to note that workdays should be considered. This means that federal holidays, weekends, and days when the workday is cancelled, like during natural disasters, should NOT be counted towards the calculation.

3. Step 3: Multiply the number of workdays by the number of employees

   Since it’s a calculation for the entire company, the number of workdays should be multiplied by the number of employees to determine how many work hours are accumulated by everyone within the company.

4. Step 4: Multiply it by 100

   Since the absentee rate should be in percentage, it should be multiplied by 100 to get a more accurate number.

Absenteeism rate: example calculations

To put the above example into practice, let us assume that a small startup with a business operation of 20 employees is calculating its absenteeism rate for August. Let us also assume that a total number of 10 employees called in sick for work due to an outbreak of flu within the workplace during the given period.

Thus, the following formula can be used to calculate the entire team's absence rate:

10 (absences) / (21 workdays in August x 20 employees) x 100

This means that the absence percentage for a startup with 20 employees would be 2.3%. It’s above the suggested absenteeism rate for companies, but it should be noted that the flu outbreak had a big factor to play in the above example.

It's important to note that the formula above can be used as a general absenteeism rate formula as well as a sickness absence rate formula.

How can companies lower their absenteeism rate?

Companies can lower employee absence rates by providing employees with a more livable work balance on top of providing them with employee assistance program. Better work-life balance not only provides them with better mental health, but also helps them feel less burnt out, which lowers chronic absenteeism in the long run.

It's also good to encourage employees to share ideas on what can help reduce absenteeism in the workplace. This doubles as an employee engagement tool, as well as targeting absenteeism, making for a more positive working environment.

Effective interventions by HR managers are also a good way to prevent excessive absenteeism. Keep in mind that as HR professionals, it's important to keep employee satisfaction in mind, and be as gentle as possible without sounding patronizing.

Poor mental health plays a big factor in absenteeism - thus, it's always important to create more engaged employees by helping them with mental health initiatives to lower the employee absenteeism rate and boost employee wellbeing.

That said, HR leaders should provide employees with better pay to address absenteeism as it's one of the main underlying issues. Thus, it’s highly suggested for companies to use a pay equity software to provide support to a company’s pay gap issues but also help stop absenteeism in the long run.