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The Meeting Cost Formula, Explained

One formula, four inputs. Here is how to use it — and what most people get wrong.

Every meeting has a price. It is not a feeling, and it is not a guess — it is arithmetic, and it takes about ten seconds once you know the formula. The reason most teams never see the price is not that the math is hard. It is that nobody writes it down. This page does the math out loud, input by input, so you can price any meeting on the back of an envelope — and so you can spot the places where the usual estimate quietly goes wrong.

Step 1: Count the attendees — everyone

The first input is the headcount, and it is the one people undercount most. Everyone in the room counts, including the organizer, the person who only listens, and the person who joined “just to stay in the loop.” If ten people are in the room, the cost has ten multipliers. If five of them do not need to be there, the meeting costs twice what it should — and the fix is not a shorter meeting, it is a shorter guest list. Count heads at the start, not at the end: the people who left early still got paid for the time they were there.

Step 2: Find the real hourly rate

The second input is the average hourly rate of the attendees. For salaried employees, divide annual salary by the number of working hours in a year — about 2,080 for a full-time schedule (40 hours a week × 52 weeks). A $120,000 salary works out to about $58 an hour ($120,000 ÷ 2,080 = $57.69). A $90,000 salary is about $43 an hour. For contractors, use their billed rate, which is already hourly. For a mixed team, use the average of the room — or run the numbers in the calculator and try the low and high rates to see the range. If you do not know anyone’s salary, $100 an hour is a reasonable stand-in for a mid-level professional; $50 is junior, $150 is senior or specialized.

Step 3: Load it — add about 30%

The third step is the one most people skip, and it understates the cost by nearly a third. An employee costs more than their salary: benefits, payroll taxes, equipment, and overhead add roughly 30% on top. That $58-an-hour employee really costs about $75 an hour ($58 × 1.3 = $75.40). A $100-an-hour base rate is really $130 an hour loaded. Use the base rate when you are estimating casually. Use the loaded rate when the number is going into a budget, a business case, or a conversation with finance — because that is the number the company actually pays.

Step 4: Multiply by the duration in hours

The last input is the duration, converted to hours. Thirty minutes is 0.5 hours. Forty-five minutes is 0.75. Ninety minutes is 1.5. This step is where small meetings hide their cost: a 15-minute standup is a quarter of an hour, and a quarter of an hour times five people times $100 an hour is $125 — not “basically free.” And remember the meeting’s real duration, not its scheduled one: the meeting that runs ten minutes over costs a sixth more than the one that ends on time.

Worked example 1: the design review

Six people, $80 an hour each, ninety minutes. Base cost: 6 × $80 × 1.5 = $720. Fully loaded at 30%: the rate becomes $104 an hour, so 6 × $104 × 1.5 = $936. If that review happens every week for 48 working weeks, it costs $34,560 a year at base rates — $44,928 loaded. That is the number to put in front of the team before the next review is booked.

Worked example 2: the planning session

Ten people, $60 an hour each, two hours. Base cost: 10 × $60 × 2 = $1,200. Fully loaded: the rate becomes $78 an hour, so 10 × $78 × 2 = $1,560. A two-hour planning session with a big room is a $1,500 decision, and it is worth asking whether the plan could have been written first and reviewed in half the time.

Common mistakes

• Using salary as the hourly rate. A $120,000 salary is not $120 an hour; it is about $58. Dividing by 2,080 hours is the correct conversion.
• Forgetting the 30% load. Salary is not total cost. Benefits and taxes add roughly a third, and leaving them out makes every meeting look a third cheaper than it is.
• Counting only the people who talk. Listeners get paid too. If they are in the room, they are in the formula.
• Ignoring prep time. If attendees spend ten minutes preparing, that time belongs in the cost — it is hours the company paid for, even though it happened before the meeting started.
• Rounding the rate down to feel better. Picking $50 an hour because the real number is uncomfortable does not make the meeting cheaper. It makes the decision worse.

The formula is not there to make you feel guilty about meeting. It is there so the decision to meet is an informed one. A $1,000 meeting can be a bargain if it prevents a $10,000 mistake. A $100 meeting is a waste if the same ten minutes of reading would have done the job. The only meeting that is always too expensive is the one nobody priced.