# Sales Equivalent Dollars

Purpose: To assist in the representation of Health & Safety (H&S) losses or savings as SE\$. This will enable a person to demonstrate to general management the TRUE costs or savings of H&S dollars. LEARN MORE. General management does not realize the additional dollars required in sales to offset an H&S expense. Please also check out the “Safety Pays Calculator” at the OSHA.gov website.

For example, a \$1000 savings or expense for a business operating at a 5% profit margin represents either a SE\$ savings or cost of \$20,000. And that is for the direct cost alone.

It is widely accepted that the indirect cost is actually 2-4 times greater than the direct cost so if a conservative indirect cost multiplier of just 2X is used that \$20,000 actually becomes \$60,000. The use of an indirect cost multiplier of 2X can be supported and documented by an extensive study in the Archives of Internal Medicine.

### Example using only direct cost:

Assume a \$10,000 workers comp cost for a business with a 5% profit margin.

SE\$ = \$200,000. Therefore it requires additional sales of \$200,000 to offset the \$10,000 loss.

### Example using an indirect cost multiplier of 2X:

Simply take the direct cost in SE\$ and multiply it by 2 to arrive at the indirect cost.

\$200,000 X 2 = \$400,000

Then add this indirect cost to the direct cost.

\$200,000 direct cost + \$400,000 indirect cost = \$600,000 total sales to offset the initial \$10,000 cost.

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