Cost per hire calculator: the formula, what to count, and a worked example (2026)
Cost per hire is total recruiting spend divided by the number of hires in the same period. Calculate yours, see what belongs in internal and external costs, and why the software line can be zero.
Last updated 3 September 2026. Competitor pricing and plan limits are re-verified against each vendor’s own pages.
Cost per hire
₹50,000
Total costs ÷ hires: ₹200,000 ÷ 4
What is the cost per hire formula?
Cost per hire = (internal costs + external costs) ÷ number of hires. All three figures must cover the same period, usually a quarter or a year, and the hires counted are the ones who accepted, not the ones who were offered.
What counts as an internal cost?
- Recruiter salaries, or the share of an HR generalist's time spent on hiring
- Hiring managers' and interviewers' time, at their hourly cost, for screening and interviews
- Employee referral bonuses paid in the period
- Recruiting software: the ATS, scheduling tools, assessment tools
- Onboarding administration, if you choose to include it; state which
What counts as an external cost?
- Job board postings and promoted listings
- Recruitment agency or consultancy fees, typically a percentage of first-year CTC
- Background checks and paid assessments
- Candidate travel and relocation
- Career fairs, campus visits and employer-branding spend attributed to hiring
A worked example
| Line | Amount |
|---|---|
| Recruiter time (one person, half their quarter) | ₹1,05,000 |
| Interviewer time (24 interviews × 1.5 hours) | ₹36,000 |
| Applicant tracking system (ofper) | ₹0 |
| Referral bonus (one hire) | ₹9,000 |
| Internal costs | ₹1,50,000 |
| Job board postings | ₹30,000 |
| Background checks (4) | ₹20,000 |
| External costs | ₹50,000 |
| Total ÷ 4 hires | ₹50,000 per hire |
How do you reduce cost per hire?
The two lines that move are interviewer time and external spend. Screening questions that knock out unqualified applicants before anyone reads a resume cut interviewer hours; a careers page and a job page that search engines index cut board spend for roles that do not need paid reach. Software is usually the smallest line and, with a free ATS, zero.
Do not compare your figure with a published industry benchmark unless you know that benchmark counted the same lines. Most do not say.
Questions, answered straight
Should salaries of the hires be included in cost per hire?
No. Cost per hire measures the cost of the recruiting process, not the cost of the employee. Salary belongs in a different calculation.
What is a good cost per hire?
Lower than your own last period for the same kind of role, with the same lines counted. Published averages differ so much by role, country and what was counted that a single target is not useful.
Does this calculator store what I type?
No. The arithmetic runs in your browser and nothing is sent to ofper or anyone else.