What (Definition)
Total annual Salary is the sum of actual annual salaries of current employees. This is based on the annual salary agreed with the employee and not the salary paid to employee so far.
Why (Benefits)
Total Annual Salary is a good indicator of how much is spent on paying salaries to the employees in a company.
When analyzing the expenses of a company, payroll expenses are usually an important part. This will allow future planning for company including hiring decisions.
It is also common to segment this metric by Department or location to identify the salary distribution.
How (Calculation?)
Formula: Sum of Actual Annual Salaries of Employees
If we have a list of employees and their salaries, we can calculate the total salary.
In the above example, we have salaries of 10 employees. We can just sum them up to arrive at total salary.
