Have you noticed some gaps in your rota lately? Fewer team members on the floor or out on the road? You’re not imagining it. Employee absenteeism is on the rise across the UK, and it’s costing businesses more than ever before. But how much exactly?
This guide breaks down how to calculate your employee absenteeism percentage and then translate the numbers into a clear financial impact. From here, you can start reducing your cost of employee absenteeism with practical, people-first solutions.
The multi-billion pound problem: Understanding the true cost of absence
Over one in five working-age adults are now out of the workforce, according to the UK Government’s new Keep Britain Working review. Many of these are due to ill health or disability, reinforcing the scale of the UK’s health and inactivity challenge. But for those employed in the workforce, but not able to attend, this employee absenteeism is a major cost to businesses in the UK. Whatever the reason for the absence, the result of every person who can’t be present at work is a loss of productivity and disruption that adds up fast financially. Here’s the true cost of employee absence upfront:
- £103 billion is the estimated annual cost of workplace sickness to the UK economy, which is up £30 billion since 2018, according to the Institute for Public Policy Research
- 148.9 million working days were lost to sickness or injury in 2024 — an increase of 9.9 million compared with pre-pandemic levels
- The average employee lost 4.4 days of work in 2024, nearly double pre-pandemic averages
- Absence is highest in the public sector (2.9%), compared with 1.8% in the private sector
- Minor illness remains the top cause of absence (30%), followed by musculoskeletal issues (15.5%), mental health conditions (9.8%), and respiratory illness (7.3%).
- Employees with long-term health conditions take 4 x more sick leave than those without (4.0% vs 1.0%).
When these days are multiplied across teams, the costs are stark. For a business with 250 employees, even an average absence rate equates to hundreds of lost workdays each year and tens of thousands of pounds in wages, cover, and lost output.
How to calculate your absenteeism rate in 5 steps
Your absenteeism rate shows how much work time your organisation loses to unplanned absence. It’s simple to calculate once you know your key figures.
1. Start by gathering your data
Collect the total number of working days (or hours) lost to sickness or unplanned absence over a set period, such as monthly, quarterly, or annually. Make sure you’re focused on unplanned absence only, meaning you should exclude other time off, such as holidays and parental leave.
2. Count your available working days
Multiply the number of employees by the number of working days in that same period.
Example: 250 employees × 260 working days = 65,000 available days.
3. Apply a cost of employee absenteeism formula
Use the following formula to calculate your absenteeism rate:
| Total Days Lost to Absence | × 100 | = Absenteeism Rate (%) |
Total Available Working Days |
Example: Imagine your team of 250 employees lost 1,625 working days to sickness or unplanned leave last year.
| 1625 lost working days | x 100 | = 2.5% |
| 65,000 available working days |
4. Benchmark your figure against national averages
The UK average for sickness absence is 2.0%, or 4.4 days per employee per year, according to the Office for National Statistics. Anything significantly higher may point to cultural, wellbeing, or management issues.
Example: If your absenteeism rate is 2.5%, then you’d be 0.5% above the national average, giving you reason to explore the roots of this lost work in more detail.
5. Track your absenteeism rate over time
While this calculation gives you a snapshot of what absenteeism looks like at any particular moment in time, you’ll see the bigger picture by calculating this rate regularly. For example, you might monitor absenteeism on a monthly, quarterly, or annual basis to spot trends early.
Perhaps a new manager is causing more people to take time off, or you notice a dip after a particularly stressful project. Spotting any hint of a rise allows you to step in and take action before absenteeism poses a threat to your business.
How to calculate the direct and indirect financial costs of employee absenteeism
Once you know your absenteeism rate, your next step is to calculate what those lost days are costing your organisation. The cost of absenteeism and other lost time incidents includes both direct and indirect expenses.
Direct costs of employee absenteeism
These are the costs you can see on your balance sheet. To calculate each, multiply the number of absence days by its associated daily cost.
| Example cost type | Definition | How to calculate it |
| Sick pay | Salary paid to employees while absent | Average daily wage × total days lost |
| Overtime pay | Extra pay to staff covering the absent person’s work | Overtime rate × hours worked to cover absence |
| Temporary staff or agency cover | Fees to bring in replacements | Daily agency cost × number of days covered |
| Reduced productivity | Output lost when roles can’t be fully covered | Estimate % productivity drop × value of lost output |
| Lost time to injury | Cost of workdays lost due to workplace injury or accident — a key KPI in logistics, warehousing, and manufacturing sectors | Number of injury-related lost days × average daily wage (plus replacement or overtime costs if applicable) |
| Admin and HR processing | Time spent managing absence records | HR hourly rate × average admin time per case |
| Occupational health referrals | External medical or support costs | Number of referrals × average cost per referral |
Borrow this direct cost formula: Direct Cost (£)=∑(Absence Days×Cost per Day)
Example: Your organisation has 250 employees and recorded 1,625 absence days last year. The average daily wage is £150, and you spent another £50 per day on overtime and temporary cover.
To calculate your total direct cost: 1,625 x (£150 + £50) = £325,000
So your direct cost of absenteeism is approximately £325,000 per year — and that’s before you account for indirect costs such as lost productivity or turnover.
Indirect costs of employee absenteeism
The indirect costs of absenteeism are the harder-to-see ripple effects that gradually erode performance and profit. They’re difficult to measure precisely, although there are practical ways to estimate them.
| Example cost type | Definition | How to calculate it |
| Lost productivity | Colleagues spend time covering work or priorities slip. | Use 25-50% of average daily wage as a proxy per lost day. |
| Team burnout or turnover | Increased workload drives more absence or resignations. | Estimate recruitment/training cost per replacement × likely turnover linked to absence. |
| Decline in morale and engagement | Productivity drops when absence feels unfair or chronic. | Estimate 10-20% of salary cost for affected teams. |
| Customer impact | Missed deadlines or reduced service quality. | Approximate cost of lost clients or reduced orders. |
| Management time | Managers spend time handling absence rather than core work. | Average manager hourly rate × hours per absence case. |
| Knowledge loss | Critical tasks or expertise are delayed when key staff are off long-term. | Estimate based on replacement training or productivity drop during ramp-up. |
Borrow this indirect cost loss formula: Total Absence Cost (£)=Direct Cost×Multiplier (1.5–2)
Example: From the earlier example, your direct cost was £325,000.
If you apply a 1.5x multiplier to reflect the impact of overtime, lost productivity, and reduced morale:
£325,000 x 1.5 = £487,500
That brings your organisation’s total annual cost of absenteeism to around £487,500, which is almost half a million pounds for a 250-person business.
Even small fluctuations in absence rates or average salaries can increase this figure dramatically, which is why monitoring and prevention matter as much as measurement.
Actionable strategies to reduce the cost of employee absenteeism
Once you’ve calculated the financial impact of absence, the next step is reducing it, by tackling the underlying causes that drive costs. Here are a few proven strategies to reduce employee absenteeism:
- Review and update your absence policy: A clear, supportive policy helps managers respond consistently and employees understand what’s expected. Clarity on absence and leave management prevents confusion and any unnecessary time off.
- Train your managers: The ability to recognise early signs of stress or disengagement enables managers to prevent short-term issues from turning into long-term absences. Confidence and empathy in these conversations are critical cost savers.
- Offer flexibility: Hybrid and flexible working models allow people to balance work with health and caring responsibilities, reducing both sick days and turnover-related costs.
- Prioritise mental health and wellbeing: Mental health remains one of the leading causes of absence in the UK. Accessible, stigma-free support helps employees seek help early and stay well.
- Recognise and appreciate attendance: A simple thank-you either in public or private builds morale and connection. Engaged, valued employees are less likely to take unplanned time off.
Lower the cost of absenteeism with Sonder
Sonder helps organisations cut the costs of employee absenteeism at the source. As a modern alternative to traditional employee assistance programmes, Sonder is designed to provide proactive, on-demand support for your workforce.
Unlike reactive EAPs that step in only once a problem escalates, Sonder combines 24/7 mental health, medical, and wellbeing support in one simple app. Employees connect instantly with qualified nurses, mental health professionals, and wellbeing experts, without waiting weeks for a referral or appointment. Meaning your people can get help sooner, and get back to work, faster.
Here’s what you can expect from Sonder:
- Boosted productivity
- Higher engagement
- Stronger, healthier workplace culture
- Measurable savings on wellbeing spend
- Reduced need for sick leave
Want to learn more? See how Sonder can reduce your cost of employee absenteeism and support your people to thrive — book a demo today.
FAQs
What is the average cost of absenteeism per employee in the UK?
The average cost of employee absenteeism in the UK could now be as high as £3,029 per employee per year. This estimate is based on recent IPPR data showing that workplace sickness costs the UK economy around £103 billion annually, divided by roughly 34 million people in employment.
That’s notably higher than the often-quoted £568 per employee per year industry benchmark reported by MoorePay. However, MoorePay’s figure is drawn from pre-pandemic data sources, some dating back to 2016-2018; it also likely underestimates the current cost of absence in a post-Covid landscape.
How do you calculate employee absenteeism rate?
Your absenteeism rate is the percentage of working time lost to absence. Divide the total days (or hours) lost by the total available working days, then multiply by 100 to reach your percentage.
What are the hidden or indirect costs of absenteeism?
Hidden costs of absenteeism include lost productivity, overtime payments, reduced morale, management time, recruitment, and training. These indirect costs often exceed direct wage costs. Many HR teams estimate the true financial impact by multiplying direct costs by 1.5 to 2 times.
How does absenteeism impact workplace culture and morale?
High absenteeism can lower morale, create resentment among employees who pick up extra work, and weaken trust in management. Over time, it lowers engagement and increases turnover. Reducing absenteeism through comprehensive wellbeing support can restore confidence and team cohesion.
What can employers do to reduce absenteeism and its costs?
Employers can reduce absenteeism by addressing root causes rather than enforcing attendance. Key steps include updating absence policies, training managers, offering flexible work, and providing proactive health and wellbeing support. EAP alternatives like Sonder enable employees to access care early, which prevents small issues from becoming costly absences.
