HR experts and people/culture professionals, In your experience, what should be included in an HR budget? (items, like branded t-shirts, coffee mugs etc., employee training etc.? Other items that people tend to fly "under-the-radar"?) How do you format an HR budget? Are there tools you would recommend or just an old-fashioned spreadsheet? Who should be part of the planning? What line items need to be included? How much is a typical HR budget?

In my experience, an HR budget should cover a variety of line items that support both employee engagement and the smooth functioning of HR operations. Key areas in my budget include recruiting and onboarding (such as background checks and new hire gifts), employee engagement (like team lunches, holiday gifts, and recognition awards), and training (including tuition reimbursement and safety courses). It's also important to account for software and subscriptions (HRIS, LMS, AI tools), HR staff wages and benefits, and professional development. A well-rounded HR budget should also include fees for legal and consulting services. As for tools, spreadsheets have always worked for me. My best advice is to align with the finance team early on-they likely have strong opinions on format and construction.

At our company, the HR budget goes beyond payroll and benefits it's about supporting growth and culture. Key items we always include: 1. Employee Development - Training, certifications, and leadership workshops keep our team sharp. Without this, people feel stuck. 2. Recognition & Perks - Small rewards like gift cards, branded T-shirts, or team outings boost morale. 3. Wellness Initiatives - Gym stipends, mental health resources, and wellness days improve engagement. 4. HR Tech & Tools - Payroll, hiring, and engagement software save time and reduce errors. 5. Recruitment & Retention - A solid hiring budget, referral bonuses, and employer branding help attract top talent. A common mistake is skipping manager training, DEI programs, and stay interviews, which are just as crucial as onboarding. For budgeting, we use spreadsheets for flexibility and HR software for tracking trends. HR, finance, and leadership all collaborate on planning. Typically, HR budgets range from 1-3% of total revenue, but cutting corners leads to higher turnover and bigger costs in the long run.

An HR budget should encompass a wide range of expenses related to employee management. Beyond obvious items like salaries and benefits, it should include recruitment costs (job postings, agency fees, background checks), onboarding expenses (training materials, new hire paperwork processing), employee training and development (workshops, certifications, online courses), compensation and benefits administration (software, consulting fees), employee relations (investigations, mediation), HR technology (HRIS, payroll systems), and compliance (legal counsel, audits). "Under-the-radar" items often include employee recognition programmes (awards, gifts), wellness initiatives (gym memberships, health screenings), office supplies specific to HR, travel for conferences or training, and even small things like branded merchandise (t-shirts, mugs) for employee engagement. A well-rounded budget also accounts for potential legal fees, severance packages, and unexpected costs related to employee issues. Formatting an HR budget can be done in various ways, but a clear, organised structure is key. Our approach is to categorise expenses (e.g., compensation & benefits, recruitment, training & development) and then list individual line items within each category. While spreadsheets are a simple starting point, dedicated HR budget software or modules within HRIS systems offer more robust features like tracking actual spending against budget, generating reports, and forecasting future expenses. Planning should involve key stakeholders, including HR leadership, finance representatives, and department heads, as they provide valuable insights into current needs and future plans. There's no "typical" HR budget percentage, as it varies significantly based on company size, industry, and strategic goals. However, benchmarking against industry averages can be helpful. Of course, the budget should align with the organisation's overall strategic plan and be flexible enough to accommodate changing needs.

While it's obvious that employee compensation needs to be included in HR budgets, it's easy to underestimate these costs by failing to include all the details. For instance, you need to include the likely overtime pay, bonuses, incentives, and raises that will be paid over the designated period. Failing to account for these additional payments is one way HR teams often get into trouble with their budget. Another category that often gets overlooked are employee engagement and retention activities. This includes things like team building activities, company parties or events, employee recognition programs, and the costs of conducting stay interviews or employee surveys. Investing in these areas can often be a long-term cost saver because they can have a positive impact on retention, lowering your long-term recruitment costs. As far as the tools to use, I would say the best choice depends on the size of your team. For a small company, a spreadsheet can be effective and is often the most cost-effective approach. However, for larger teams with more complex budgets, I would recommend using a tool like BambooHR or ADP Workforce Now, both of which have effective budget tracking tools as well as other helpful features, like workforce planning and payroll management.

What should be included in an HR budget? (items, like branded t-shirts, coffee mugs etc., employee training etc.? Other items that people tend to fly "under-the-radar"?) I believe anything related to employee engagement should fall under HR. This includes: Company benefits, such as insurance, EAP, salary sacrifice, etc; company social events -Venue, Subsistence, and Travel; Engagement initiatives; Onboarding/celebratory swag, and Training. How do you format an HR budget? Formatting an HR budget means you have to rely on a series of data points, which of course have to be accurate. For me, I'd break these data points down into 3 core sections - Comparative data, Projections, and Tracking. Are there tools you would recommend or just an old-fashioned spreadsheet? This really depends on how many people in the organisation. Whilst we're a big believer in moving away from Spreadsheets, they can be sufficient for small businesses or startups. However, they can be prone to error or time consuming to keep up with - especially if a company goes through rapid growth. You may also have to consider how much is spent on individual people and when, as this generally needs to be reported to HMRC. Accounting software can help you keep everything in one place, with the option to run reports. I like to use spreadsheets and accounting software, for accountability, and I can add my own notes to a spreadsheet. Who should be part of the planning? For me, I'd include Finance for budgets and tracking for HMRC (reporting). Higher-ups: ensuring everyone is on the same page for proposed plans over the year. And, if needed, coordinating with Marketing when considering banded swag. What line items need to be included? If it is line items on a spreadsheet, or any type of tracker: Employees, including start date (and leaving date if applicable) Dates Details of costs Total (including VAT) Total (no VAT) VAT Costs per person (if applicable) Which employees the costs apply to Category of spend (such as training, subsistence, relevant benefit) Tracking against the total budget Total monthly spend Projections Known costs, amounts and when they will occur How much is a typical HR budget? How long is a piece of string?! It comes down to the company to decide that - there really is no 'typical' HR budget!

In my experience, I have learned that certain things are simply must-haves in an HR budget, things like; talent acquisition and recruitment, compensation and benefits, learning and development, talent management, employee safety and wellbeing, DEI, HR technology, HR administration, etc. However, while these may be the obvious components of an HR budget, other items that are often overlooked but should be considered when creating an HR budget include; employee perks and benefits like gym memberships and meal delivery, compliance and risk management, and employee recognition and rewards. All of these additions are particularly important because they significantly impact employee engagement, retention, and overall job satisfaction. These often overlooked items in an HR budget, not only enhance the support employees receive, helping to boost employee morale and increase productivity, but they also help ensure that the organization can mitigate potential risks. On the other hand, when it comes to formatting my HR budget, I usually stick to the old-fashioned spreadsheet because, In addition to being very easy to use, it also allows me to organize, track, and make as many adjustments as I need to make with ease. Plus, spreadsheets are quite popular, making them easily understood when sharing and collaborating with others. Well, the truth is that planning an HR budget isn't just a task an HR leader takes on alone, or delegates to a member of their team to handle alone because it is essential to involve key stakeholders to ensure adequate representation and to make sure that the budget adequately meets the organization's goals and objectives. Some line items that should be included in an HR budget include; personal costs, miscellaneous expenses, and onboarding. As for the size of a typical HR budget, I would just have to say that it depends on the organization, industry, and location. However, a typical HR budget could cost about 1-5% of the organization's total revenue

Building an HR budget means looking past the surface and digging into what your team really needs. Sure, you've got your basics-training, hiring, health plans-but the hidden stuff packs a punch too. Take wellness programs or mental health support. They might not scream "urgent HR expense," but man, do they move the needle on keeping people happy and sticking around. I've watched these programs slash turnover and light up productivity time after time. When I map out HR budgets, I roll with a mix of spreadsheets and HR tech. Tools like Gusto or Zenefits handle the daily grind smoothly, but for the bird's eye view of where we're headed? Nothing beats a solid spreadsheet. You can spot those cost projections and missing pieces in a snap. Nailing an HR budget takes teamwork-especially with the brass and number crunchers. They keep HR's game plan locked in with the company's big picture. Most places sink about 5-10% of their total budget into HR, depending on their size and what they're gunning for. But here's the thing I've learned: pour money into the right spots-like keeping people fired up and healthy-and watch that investment multiply in productivity and team spirit.

An HR budget isn't just about payroll-it's a strategic investment in talent retention, engagement, and company culture. A well-planned budget supports hiring, employee development, and workplace well-being while aligning with business goals. Key Items to Include in an HR Budget 1. Compensation & Benefits Salaries & Wages (HR staff & general workforce) Bonuses & Incentives Health & Wellness Programs (insurance, EAPs, mental health support) Retirement Contributions (401(k), pension plans) Paid Leave & Parental Benefits 2. Talent Acquisition & Onboarding Recruitment Costs (job boards, LinkedIn, agency fees) Applicant Tracking System (ATS) Background Checks & Pre-Employment Assessments Onboarding Materials & Tech 3. Learning & Development Employee Training & Upskilling (leadership, technical skills) HR Certifications & Continuing Education Tuition Reimbursement Programs Coaching & Mentorship Initiatives 4. Employee Engagement & Culture Branded Swag (T-shirts, mugs, welcome kits) Team-Building & Recognition Programs Diversity, Equity & Inclusion (DEI) Initiatives Workplace Perks (snacks, wellness stipends, commuter benefits) 5. Compliance & HR Technology HR Software & Payroll Systems (Workday, BambooHR) Legal & Compliance Costs (labor law updates, audits) Workplace Safety & Risk Management Programs Overlooked Budget Items Stay Interviews & Exit Interview Tools AI & HR Process Automation Parental & Caregiver Benefits Employee Resource Groups (ERGs) Budgets How to Format an HR Budget Use a spreadsheet or HR software to categorize expenses into fixed, variable, and discretionary costs, including projected vs. actual spending. Who Should Be Involved? HR Leadership & Finance Teams (budget alignment) Department Heads (hiring & training needs) Executives (strategic priorities) Typical HR Budget Size 1-3% of total revenue for mid-sized companies $1,000-$1,500 per employee annually for training $50-$500 per employee for engagement & perks A strong HR budget isn't just an expense-it's an investment in people, performance, and long-term retention.

When creating an HR budget, it's essential to balance practical necessities with investments that enhance employee experience and company culture. At Party With A Twist, our HR budget includes both foundational expenses and under-the-radar items that contribute to team engagement and retention. Essential HR Budget Line Items: Payroll & Benefits - Even for a gig-based or part-time workforce, setting aside funds for competitive pay, performance incentives, and benefits (if applicable) is key. Recruitment & Onboarding - Costs for job postings, background checks, hiring bonuses, and onboarding materials (e.g., training videos, company handbooks). Training & Development - Workshops, online courses, and industry events to improve employee skills. Uniforms & Branded Gear - Branded t-shirts, hats, or jackets create a sense of unity and professionalism. Employee Recognition & Engagement - Bonuses, milestone gifts, or simple thank-you packages like custom coffee mugs or stickers help boost morale. HR Technology & Tools - Payroll processing software, scheduling tools (we use Homebase), and communication platforms (Slack). Compliance & Legal Fees - Budget for W-9 processing, tax forms, and HR-related legal consultations. Workplace Culture & Well-Being - Team-building events, wellness stipends, or even occasional catered meals can improve retention. Under-the-Radar Expenses: Turnover Costs - Hiring and training replacements can be more expensive than investing in current employees. Seasonal Adjustments - If your business has busy seasons, plan for increased hiring, uniform costs, and training expenses. Employee Surveys & Feedback Tools - Helps gauge engagement and satisfaction, leading to data-driven HR decisions. HR Budget Format & Tools: A simple spreadsheet (Google Sheets, Excel) works well for startups, while HR software like BambooHR, Gusto, or Justworks can streamline budgeting for growing businesses. Who Should Be Involved? The HR team, finance department, and leadership should collaborate. Input from employees can also highlight overlooked needs. HR Budget Range: HR budgets typically range from 1% to 3% of total revenue, but for small businesses, a percentage of payroll (e.g., $500-$2,000 per employee annually) is a more flexible benchmark.

How to Structure an HR Budget for Maximum ROI An HR budget should be divided into core areas: Compensation and benefits, Recruitment, Training and development, Employee Engagement, Compliance, and Miscellaneous Perks. Each category should have clear KPIs. A recruiting software company we advised tied L&D spending directly to promotion rates, proving the ROI of training initiatives.

When creating an HR budget, it's important to include items that support employee growth and satisfaction. This means budgeting for employee training, wellness programs, and recruitment costs. Smaller things like branded merchandise, team-building activities, and office snacks can also boost morale and should be considered. Don't forget to include expenses for employee benefits and compensation, as these are key to attracting and keeping talent. For organizing the budget, I recommend using simple tools like spreadsheets. They're easy to update and provide a clear overview of spending. The HR team, along with finance and leadership, should be part of the planning process to ensure the budget aligns with company goals. Key areas to focus on include training, health benefits, recruitment, performance rewards, and office improvements. The size of the budget can vary, but it's essential to allocate funds in a way that supports employee development and keeps the workplace positive.

When I started drafting HR budgets, I realized it wasn't just about salaries or standard items like recruitment costs. It's about creating a roadmap for impacting employees positively. For example, I overlooked small things like branded t-shirts until an employee once mentioned how wearing company gear made them feel part of a shared mission. Since then, I've included items like swag, employee welcome kits, and even celebration budgets for milestones. These little investments go a long way in building engagement. Training programs were another eye-opener. Early on, I learned not to underestimate them. Whether it's leadership workshops or technical skill-building sessions, these investments always yield long-term benefits. I also started budgeting for mental health support after a manager shared how workplace stress affected their team. Planning for wellness initiatives-yoga, counseling, or even flexible work tools-became crucial. I find spreadsheets intuitive, but involving operations teams or finance ensures accuracy. The key is to think beyond policies and numbers and focus on experiences that help people thrive.

We typically allocate a budget for personalized employee incentives, professional fees for upskilling, and funding for wellness programs to keep employee morale up and make mental health services more accessible. Our budget planning starts with identifying every list item, such as costs on personnel, recruitment and retention, HR tech and software, employee development, and compliance and legal matters. In particular, we utilize Wave Accounting's features to help us better track last year's budget performance and use any relevant data to ensure we're able to stay on track with the current year's budget. Myself along with HR professionals and a few department heads are included during planning. Also present is a representative of our employees to further promote good communication within the workplace. I find their input beneficial at influencing our budget to be more intentional so it wouldn't be less or more than our typical HR budget, which is around 3% or 5% of last year's revenue.

Hiring isn't just about salaries-there are hidden costs that should be planned for. A reasonable HR budget includes job posting fees, background checks, and recruitment software. Another area people forget is onboarding. Setting up new employees with laptops, software licenses, and access to necessary tools can add up quickly. If a company hires regularly, these costs should be accounted for rather than taken from the general IT budget at the last minute. A mix of spreadsheets and HR software works well for tracking. If hiring is a big part of operations, using an HR tool that integrates with finance can help monitor spending over time. People from HR, finance, and department leads should be involved so that the budget reflects actual hiring needs. The total budget depends on the industry and company size, but ensuring smooth onboarding saves money by reducing turnover.

Beyond training and payroll, an HR budget should cover items like employee appreciation gifts, software subscriptions for remote collaboration, and team-building event costs. Flexible work stipends for home office upgrades are another under-the-radar cost to consider. Use dynamic spreadsheets or HR-specific budgeting platforms that integrate with accounting systems. Include payroll specialists, IT, and department leaders in planning to anticipate tech or hybrid work costs. A typical budget is industry-dependent but may also allocate 0.5% to 1% of total company revenue toward employee retention programs.

An effective HR budget goes beyond salaries and benefits, incorporating items that enhance company culture, employee engagement, and long-term retention. Training and development programs, branded swag like t-shirts and coffee mugs, wellness initiatives, and team-building activities are essential yet often overlooked. Employee recognition programs and professional growth stipends can also make a big impact on morale and retention. We've found that structuring an HR budget in a simple but flexible format works best. A detailed spreadsheet with categories like recruitment, onboarding, training, engagement, and operational costs keeps everything transparent. Some companies use HR software like BambooHR or Workday, but a well-organized Google Sheet can be just as effective. HR, finance, and leadership teams should collaborate on planning to align the budget with business goals. Typical HR budgets range from 1% to 3% of total revenue, but investing in the right areas-especially in engagement and development-can have a significant ROI in productivity and retention.

In addition to typical expenses like pay, benefits, and training, an HR budget should cover subscriptions for career development, wellness initiatives, and apps that assist mental health. Items like branded merchandise (t-shirts, mugs, notebooks) help promote team culture, while ergonomic office supplies can reduce employee strain. Using tools like HRIS software that includes budgeting modules can streamline planning beyond spreadsheets. Involving department managers and finance in the process ensures all needs are captured. Don't forget hidden costs like onboarding materials and farewell gifts for retirees. A typical HR budget varies widely but often constitutes around 1-3% of company revenue.

An HR budget must account for more than salaries and benefits. Overlooked expenses-compliance costs, legal fees for policy updates, employee wellness programs-create liability risks if ignored. Training, workplace investigations, and background checks should be prioritized. Branded items like T-shirts and coffee mugs boost morale but should never replace essential compliance measures. A structured HR budget should break down costs by recruitment, retention, compliance, and engagement. Spreadsheets work, but HR software streamlines tracking and forecasting. Failing to allocate funds for legal compliance, workplace investigations, or risk management leads to costly lawsuits. HR, finance, and legal counsel must collaborate to align spending with business needs. Key line items include payroll software, legal fees, DEI initiatives, training, and engagement programs. Properly allocating funds prevents legal issues and strengthens workplace culture.

As an internationally remote team, on top of the employee compensation and benefits packages, we continuously expand our value offering to our employees to solidify our shared commitment for their individual growth. Some of these, that are all covered by the HR budget, are technology stipend, generator stipend, 401(k) matching, corporate training, company-wide business camp, employee referral program, paid company holidays on top of our generous PTO policy, charity matching, and chaplain on staff, among many others. There are other special programs with incentives being offered, as well. As a digital-first company, we also invest heavily on a significant number of tools and subscriptions to support our employees' needs. Formatting an HR budget requires you to begin with clear business goals to be able to effectively compartmentalize into categories, such as recruitment, employment packages, and corporate training. Work with your Finance team to design a budget sheet or tracker most suitable for your organization so, you can easily compare your spending with the previous year and forecast anticipated growth in the horizon. I highly recommend that the planning for HR budget involves key stakeholders. While HR takes the lead, it is important that department heads can also address the changing needs of their respective teams. So, before it gets signed off by Finance, accurate projections and allocation of resources are in place. It would also do you well to conduct periodic review of the HR budget based on your strategic directions and operations. Learn more about our employee benefits here: https://thriveagency.com/about/careers/

In my experience, an HR budget must include direct costs such as employee training, branded t-shirts, and coffee mugs. It should cover overlooked expenses like onboarding kits, recruitment tools, and wellness programs. Office supplies and team building funds also contribute to a balanced HR plan. Budget formatting is best handled with a clean spreadsheet. HR teams should join forces with finance and marketing. Simple tools such as Excel work well. Planning should list line items for benefits, training, engagement, recruitment, and administrative costs. Budgets generally represent a small portion of payroll, often a few percent.