Downtime Cost Calculator
System downtime is one of the most expensive unplanned events a business can face. Beyond the immediate loss of revenue during an outage, downtime costs include idle employee salaries for workers who cannot complete their tasks, the engineering and operations time spent diagnosing and recovering the system, and the longer-term customer trust damage that can accelerate churn. This calculator computes hourly revenue loss, hourly employee idle cost, total downtime cost for a specified outage duration, and the annual cost of a recurring downtime pattern so IT and business leaders can build the ROI case for availability investments.
Downtime cost formula
Hourly Revenue Loss = Annual Revenue / 8,760
Hourly Employee Cost = Affected Employees * Avg Hourly Cost
Total Cost = (Hourly Revenue Loss + Hourly Employee Cost) * Hours + Recovery Cost
Downtime cost components
- Revenue loss: direct lost sales or billing during the outage window.
- Idle employee cost: wages paid for time workers cannot be productive.
- IT recovery cost: engineering time to diagnose, fix, and restore service.
- SLA penalties: contractual payments for missed uptime commitments.
- Customer churn: long-term revenue loss from customers who cancel post-outage.
Downtime cost: frequently asked questions
What is the cost of downtime?
Downtime cost includes: lost revenue during the outage, idle employee costs (staff who cannot work), recovery and remediation costs, and potential customer churn from SLA violations. Fully-loaded downtime cost often exceeds $10,000 per hour for mid-size businesses.
How do I calculate lost revenue from downtime?
Lost Revenue = Annual Revenue / (365 * 24) * Hours Down. This gives hourly revenue, which is the direct revenue opportunity cost of downtime.
What is the difference between downtime cost and SLA penalty?
Downtime cost is the internal economic loss. SLA penalties are contractual payments to customers for breaching availability commitments. Both should be included in total downtime cost for affected service contracts.
How does downtime affect customer retention?
Extended or frequent outages damage customer trust and can trigger cancellations. Research suggests that a single major outage costing more than 2 hours can cause 3 to 5% of affected customers to churn.
What is a typical downtime cost per hour for an e-commerce site?
E-commerce downtime costs vary by traffic and conversion rate. A site generating $500,000/day loses roughly $21,000 per hour of downtime from lost revenue alone, before adding employee idle cost and recovery costs.
Sources
- National Institute of Standards and Technology (NIST): Contingency Planning Guide for IT Systems.
- U.S. Small Business Administration: Manage Your Finances.
Reviewed by the CalculatorHub team, edited by James Graham, 14 June 2026. See our methodology.