Employee Cost & TBH Calculation Methodology
Last updated: August 24, 2026
Overview
TeamOhana forecasts total workforce cost by adding two figures: what your current employees cost, and what your unfilled headcount will cost. This article explains how each is calculated, how proration and load factor apply, and how to trace any figure back to its inputs.
This is for Finance and Admin users who reconcile TeamOhana forecasts against their own budget models.
Prerequisites
The Budget and Forecast module on your plan
At least one of View headcount budget, Edit headcount budget, or View budget FY impact
A configured load factor. Every cost figure below is loaded, so the numbers will be wrong if load factor has not been set up.
What counts as TBH
A To Be Hired (TBH) position is any headcount record with no employee linked to it. Once an employee record is matched to the headcount, that position stops being TBH and moves into current employee cost.
Headcount contributes to TBH cost across these lifecycle states:
State | Counts toward TBH cost |
|---|---|
Draft | See note below |
In Approval | See note below |
Approved | Yes |
Ready to Hire | Yes |
In Progress | Yes |
Offer Stage | Yes |
Hired, employee not yet linked | Yes |
Hired and reconciled | No, moves to employee cost |
Archived | No |
Note: Archiving a headcount removes it from forecast impact. Unarchiving sends it back through approvals before it rejoins the plan.
The two cost figures
Current employee cost
Sourced from active employee records synced from your HRIS. TeamOhana takes the most recent base and variable compensation on the record, annualizes it, applies currency conversion where the employee is paid in another currency, and applies the matching load factor rule.
An employee only contributes to a headcount's cost if they are linked to that headcount.
TBH cost
Sourced from the headcount record rather than an employee record, using budgeted compensation instead of actuals. That difference is the whole point: comparing the two is what surfaces whether you are hiring at, above, or below the level you budgeted for.
The same load factor rules apply to TBH headcount as to current employees. Using one factor for both is what makes plan-versus-actual comparison valid.
[VERIFY] Confirm whether TBH cost includes budgeted variable compensation (bonus, commission) or base only. The previous version of this article used base salary alone in both formulas, but internal documentation describes TBH cost as "budgeted base plus budgeted variable comp." These give materially different numbers for any bonus-eligible or commissioned role.
Currency conversion
Compensation recorded in a currency other than your reporting currency is converted before load factor is applied.
Load factor
Load factor is the percentage added on top of compensation for benefits, payroll taxes, and overhead. It is applied after currency conversion and before proration.
Which percentage applies depends on the rule that matches the employee or headcount. Rules are evaluated in order and the first match wins. See the Load Factor Configuration Guide for how to set them up.
How proration works
Proration is where most reconciliation questions start, so the rules are worth stating precisely.
A person who was employed for the full fiscal year contributes their full annual cost. A person employed for part of the year contributes a share of it, calculated on days.
Someone who started before the fiscal year began contributes their full annual cost. There is nothing to prorate.
Someone who starts mid-year contributes from their start date to the end of the fiscal year.
Someone who terminates mid-year contributes from the start of the fiscal year to their termination date.
Worked example: a mid-year start
A headcount with $150,000 budgeted base, a 30% load factor, and a target start date of April 1 in a fiscal year running January 1 to December 31.
Annual loaded cost is $150,000 × 1.30, or $195,000.
That person is employed for 275 of the fiscal year's 365 days, a proration factor of 0.7534.
Prorated cost for this fiscal year is $195,000 × 0.7534, or $146,918.
Worked example: a mid-year termination
An employee on $120,000 with the same 30% load factor, terminating June 30.
Annual loaded cost is $156,000. They are employed 181 of 365 days, a factor of 0.4959.
Cost for this fiscal year is $77,359.
Why TBH cost rises in the next fiscal year
A headcount starting in October costs a fraction of its annual figure this year and its full annual figure next year. Nothing about the position changed. Only the number of days it occupies in the fiscal year did.
When you compare fiscal years, expect TBH cost to step up for any position that started partway through the earlier year. Reading that increase as cost growth is a common misinterpretation.
Note: Your fiscal year is configurable and does not have to be January through December. Every proration figure above depends on your configured fiscal year start and end dates.
Edge cases
Terminated employees. Once someone is marked as terminated, their compensation and load factor drop out of forward-looking totals. Historical views for past months and year to date still include them, so a year-to-date figure and a forward forecast will not agree, and should not.
Hourly employees. Calculated at 40 hours per week and 52 weeks per year for forecasting. An employee at $45 per hour is forecast at $93,600 before load factor, regardless of actual hours worked.
Part-time employees. Compensation is prorated to their schedule.
Contractors. Contract-based compensation, with an employment end date available. Load factor for contractors is typically set much lower than for full-time employees, since there is no benefits burden. That depends entirely on how your load factor rules are configured.
Verifying a figure yourself
When a number does not match your own model, the export is the fastest way to find out why. It contains four tabs:
Headcount Edit View shows TBH records with budgeted compensation, target start dates, and department. Start here when a TBH figure looks wrong.
Employee View shows current employee records with the compensation synced from your HRIS. Start here when current employee cost looks wrong.
Changes shows what changed on headcount records.
Employee Changes shows what changed on employee records, including reconciliation items where TeamOhana and your HRIS disagree.
To trace a single figure, pull the record from the relevant tab and rebuild it in order: compensation, then currency conversion, then load factor, then proration by days. The step where your number diverges from the export tells you where to look.
Most discrepancies come down to one of four things: a load factor rule matching differently than expected, a target start date that moved, an employee not linked to the headcount you thought they were linked to, or a termination recorded in one system and not the other.