How to calculate what manual work really costs you

You calculate the cost of manual work by adding up the time your staff spend on a repetitive task and the deals you lose because that task runs too slowly. The first part is simple: hours per week times the employee's full hourly cost times the number of weeks. The second part is often bigger, but it never shows up on a payslip.

Below are both formulas with worked examples in tables. The numbers in the examples are made up. Replace them with yours and in half an hour you'll have an estimate for your own business.

Why manual work feels free

Because you're paying for it anyway. The employee is in the office and the wage is the same whether they're retyping enquiries into Excel or dealing with customers. So half an hour a day of retyping seems to cost nothing.

It does cost something. That time could go into something that brings in money, or you wouldn't have to pay for it. Manual work has three costs:

1. Time: the hours someone spends on the task.
2. Delay: the deals you lose because the customer waits too long for a reply.
3. Errors: retyped data, wrong prices, forgotten enquiries.

You can calculate the first two. The third you estimate.

Formula 1: the direct cost of time

Hours per week × hourly cost of the employee × number of working weeks = annual cost of the task

Start with one task, not a whole department. For example: copying enquiries from email into a spreadsheet, preparing quotes or entering orders into a system. Track for one week how long it takes. A guess from memory is almost always too low.

How to calculate the employee's hourly cost

This is where many people get it wrong. The net wage is not the right number. An employee costs you more than they take home:

• the gross wage,
• employer contributions on the gross wage: 17.10% (16.10% for pension and disability, health and injury at work, parental protection and employment, plus 1% for long-term care since July 2025),
• reimbursement of meal and commuting costs: both are mandatory under ZDR-1, and the amounts are set by the collective agreement for your sector or, where it doesn't set them, by a government decree,
• annual holiday allowance (regres): mandatory under ZDR-1, at least the minimum wage (€1,481.88 gross in 2026), paid by 1 July,
• paid hours when the employee doesn't work: holidays, public holidays, sick leave.

The simplest way: take the employee's total annual cost as your accounts show it, and divide it by the hours they actually work.

Item	Example (made-up numbers)
Total annual cost of the employee	€30,000
Hours actually worked per year	1,600 hours
Hourly cost	€30,000 / 1,600 = €18.75

Your numbers will be different. What matters is that you use the full cost, not the net wage.

Worked example

Say an employee spends eight hours a week retyping enquiries and preparing quotes from last year's template.

Item	Value
Hours per week	8
Hourly cost	€18.75
Cost per week	8 × €18.75 = €150
Working weeks per year (excluding holidays)	46
Cost per year	€150 × 46 = €6,900

That's the cost of one task for one employee. If two people do it, double it.

This number doesn't mean you'll save €6,900. The employee won't go home. It means you have eight hours a week you can use differently: calling customers, sending follow-ups, doing work that nobody has time for now.

Formula 2: deals you lose to slow replies

This cost is often bigger than the first because you can't see it. A customer sends an enquiry, nobody replies within the hour because everyone is busy with other work, and in the meantime the customer asks a competitor too.

A 2011 Harvard Business Review study of 2,241 US companies found that firms that tried to respond to an online enquiry within an hour were nearly seven times as likely to have a meaningful conversation with a decision-maker as firms that tried an hour later. There's more on this and similar studies in our piece on speed-to-lead research.

The calculator on our website is built on this finding. The formula is:

Enquiries per month × share answered late × close rate × (1 − 1/7) × average deal value = lost revenue per month

Step by step:

1. Enquiries per month × share answered late gives the number of enquiries you reply to after more than an hour.
2. × close rate gives the number of deals you would have closed from those enquiries if you had replied quickly.
3. × (1 − 1/7) reflects that enquiries handled late turn into a deal seven times less often. So you close only one seventh of those deals and lose six sevenths.
4. × average deal value turns the lost deals into euros.

Worked example

These are the calculator's default values, also made up:

Item	Value
Enquiries per month	80
Share answered after more than an hour	30%
Late enquiries	80 × 0.30 = 24
Share of fast replies that turn into a deal	20%
Deals you would close with a fast reply	24 × 0.20 = 4.8
Lost deals	4.8 × 6/7 ≈ 4.114
Average deal value	€800
Lost revenue per month	4.114 × €800 ≈ €3,291
Per year	≈ €39,497

A note on accuracy: the HBR study measured how often a firm reached a real conversation with the customer, not closed deals directly. The calculator assumes the ratio carries over to deals. That's a simplification, so use the result as an order of magnitude, not an exact figure.

Even so, the comparison is telling. In the example, the time spent on manual work is worth €6,900 a year, while slow replies cost around €39,500. For many businesses that get enquiries online, the second number is the one that matters.

The third cost: errors

Errors can't be calculated with one formula, but you shouldn't leave them out. Manual work means manual retyping, and wherever things get retyped, mistakes happen:

• Retyped data: a wrong phone number, a mixed-up address, the wrong name on a quote.
• Wrong prices: a quote from last year's price list, a forgotten line item, a discount nobody approved.
• Forgotten enquiries: a message left sitting in the inbox of a colleague on holiday.

Each of these has a price: a corrected quote, a lost margin, an unhappy customer or a deal that never happened. If you want a number, count the errors from the last month and estimate them by type. Often it's enough just to know they exist.

Everything on one sheet

Cost	How to measure it	Example from this article
Time	Hours per week × hourly cost × weeks	€6,900 per year
Slow replies	The formula from the calculator	≈ €39,497 per year
Errors	Number of errors × estimated consequences	An estimate, depends on the business

Once you have these numbers, you can judge sensibly whether automation pays off. Compare it with the cost of the solution: if the system costs less than manual work costs you, the decision is easy. If it costs more, wait or start with a smaller task.

Where to start

Don't start with everything at once. Pick a task that meets three conditions:

1. it repeats every week in the same way,
2. you can measure it in hours or euros,
3. if you do it faster, the customer notices.

For many businesses, that's replying to enquiries. How an automatic reply within a minute works is described on the speed-to-lead page. If you want to know which other tasks are worth automating for a small business and which aren't, read what AI automation is.

The fastest first step is simple: open the calculator, enter your numbers and see what it shows.