Agency rate card and hourly rate calculator

What it's for

• Agencies setting or reviewing their hourly and day rates.
• Checking whether a quoted rate covers salaries, on-costs and overheads.
• A one-page rate card to send with proposals.

What's inside

Calculator

Per role: salary, on-costs, hours, leave, public holidays and utilisation, giving billable hours, cost per billable hour and the minimum rate for your target margin.

Rate card

Your rate for each role, the day rate, your margin at that rate, and a blended rate for a typical project mix. The printed page shows only each role's rate and day rate.

Preview

The example figures in the file (not benchmarks)

A developer on 110,000 with 20% on-costs, 40 hours a week, 4 weeks' leave, 10 public holidays and 60% utilisation bills (52 − 4 − 10 ÷ 5) × 40 × 0.6 = 1,104 hours a year. That costs 132,000 ÷ 1,104 = 119.57 an hour, plus 23.29 of overheads (120,000 shared over the team's 5,152 billable hours), so 142.86. At a 20% margin the minimum rate is 142.86 ÷ 0.8 = 178.57. With rates of 152, 179 and 223 and a project mix of 40, 60 and 15 hours, the blended rate is 175.35.

How to use it

1. Replace every yellow cell on Calculator with your own figures. The examples are only there to show how it works.
2. Put on-costs as a percentage of salary: payroll tax, retirement or pension contributions, insurance and benefits. The file doesn't fill these in, because they differ by country and person.
3. Add your yearly overheads that aren't in salaries: rent, software, and the people who don't bill.
4. On Rate card, your rate starts at the minimum rounded up. Type your actual rate over it and check the margin.
5. Add the hours each role spends on a typical project to get your blended rate. Print the Rate card sheet for proposals.

The formulas, explained

Billable hours a year

=(52 − leave weeks − public holidays ÷ 5) × hours a week × utilisation

Weeks actually at work, times hours, times the share of hours you bill. Public holidays are divided by 5 to turn days into weeks.

Full cost per billable hour

=salary × (1 + on-costs) ÷ billable hours + overheads ÷ team billable hours

What one billable hour of that role costs, including its share of the overheads.

Minimum rate

=full cost ÷ (1 − target margin)

The rate where your margin, as a share of the price, equals the target. A 20% margin needs cost ÷ 0.8, which is a 25% markup on cost.

Blended rate

=SUMPRODUCT(rates, project hours) ÷ SUM(project hours)

The average rate across a typical project, weighted by how many hours each role spends on it.

Every formula uses functions that Excel, Google Sheets and LibreOffice all have. There are no macros or scripts.

Questions