Productivity
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# How to Calculate Productivity Rate

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Productivity rate is the amount of output produced in an hour of work.

## Formula

Productivity rate is calculated as the total output of workers divided by hours worked.
productivity = output / hours worked
Output is typically a dollar amount. This is usually net output that represents the value added by the hours worked. Alternatively, output can be measured in production units or any other measure of output that is meaningful to your business.

## Example #1

Workers on a production line produce 110,000 chocolate bars with a wholesale value of \$170,000 on a shift. The costs of non-labor inputs such as ingredients, machines and electricity are \$90,000. Therefore, the workers added \$80,000 of value (\$170,000 - \$90,000) on the shift. The shift represents 64 hours of work.
productivity = \$80,000 / 64 = \$1,250 / hour
Alternatively, productivity could be calculated in units. This is useful when value added dollar amounts are difficult to estimate.
productivity = 110,000 / 64 = 1718.8 units / hour

## Example #2

A freelance designer completes 4 projects for clients with a total value of \$9,900 in a month. He has \$2000 in expenses resulting in a net profit of \$7,900. He works a total of 210 hours in the month including all administrative work and customer relationship management.
productivity = \$7900 / 210 = \$37.62 / hour
 Overview: Productivity Rate Type Definition (1) The net output produced in an hour of work. Definition (2) The value added in an hour of work. Related Concepts

## Productivity

This is the complete list of articles we have written about productivity.
Attention Span
Automation
Bikeshedding
Busy Work
Discipline
Division Of Labor
Efficiency
Employee Productivity
Flow Theory
Labor Intensive
Low Productivity
Practical
Proactive
Process
Productivity Analysis
Productivity Goals
Productivity Mgmt
Routine Work
Self-Discipline
Social Loafing
Teamwork
Telecommuting
Time Boxing
Toil
Tools
Work
Work Attitude
Work Decisions
Work Ethic
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