<PAGE>
 
                                                                      Exhibit 11
                                                                      ----------

                            TEMPLATE SOFTWARE, INC.
                   COMPUTATION OF EARNINGS PER COMMON SHARE
                                  (UNAUDITED)

<TABLE>
<CAPTION>

                                                                PRIMARY EARNINGS PER SHARE
                                         
                                                    FOR THE THREE MONTHS     FOR THE NINE MONTHS ENDED
                                                      ENDED AUGUST 31,               AUGUST 31,
                                                ------------------------------------------------------
                                                    1997          1996          1997          1996
                                                ------------------------------------------------------
<S>                                             <C>           <C>            <C>           <C>
Net income                                       $  537,940    $  425,027     $1,525,109    $  725,832
                                                ======================================================
Weighted average shares of common shares 
 outstanding                                      4,468,470     2,182,994      3,906,855     2,182,994
                                         
Weighted average effect of common shares 
 equivalents (using the treasury stock   
 method)                                          1,770,328     1,464,162      1,883,754     1,469,018
                                                                
Common shares issued within one year of  
 initial filing                                           -        64,014              -        64,014
                                                                        
Common shares equivalents issued within  
 one year of initial filing                               -       940,532              -       940,532
                                                ------------------------------------------------------ 
                                                  6,238,798     4,651,702      5,790,609     4,656,558
                                                ======================================================
                                         
Primary net income per common share and  
 common share equivalents                             $0.09         $0.09          $0.26         $0.16
                                                ======================================================

<CAPTION>
                                                          FULLY DILUTED EARNINGS PER SHARE
 
                                                    FOR THE THREE MONTHS      FOR THE NINE MONTHS
                                                      ENDED AUGUST 31,         ENDED AUGUST 31,
                                                ------------------------------------------------------ 
                                                    1997          1996          1997          1996
                                                ------------------------------------------------------
<S>                                             <C>           <C>            <C>           <C>
Net income                                       $  537,940    $  425,027     $1,525,109    $  725,832
                                                ======================================================
Weighted average shares of common shares 
 outstanding                                      4,468,470     2,182,994      3,906,855     2,182,994
                                                                           
Weighted average effect of common shares
 equivalents (using the treasury stock 
 method)                                          1,783,540     1,464,162      1,893,340     1,469,018
                                                                             
Common shares issued within one year of     
 initial filing                                           -        64,014              -        64,014 
                                             
Common shares equivalents issued within      
 one year of initial filing                               -       940,532              -       940,532  
                                                ------------------------------------------------------ 
                                                  6,252,010     4,651,702      5,800,195     4,656,558
                                                ======================================================
                                          
Fully diluted net income per common share 
 and common share equivalents                         $0.09         $0.09          $0.26         $0.16
                                                ======================================================
</TABLE>

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