Agency pricing tools

Agency bill rate & margin calculator

Turn contractor pay into a client billing target. Account for delivery costs, utilization and allocated overhead, then see the difference between markup, gross margin and contribution after overhead.

Build your pricing scenario

Illustrative starting inputs, not market averages. Replace them with your own assumptions. Inputs stay in this browser tab and are not saved or sent to analytics.

CurrencyDisplay only; no exchange-rate conversion. Enter all costs in this currency.

Contractor pay per paid hourYour base contractor cost, before the other costs below.Direct delivery costs per paid hourAdditional delivery costs on the same paid/available-hour basis. Exclude overhead below.Billable utilization (%)Billable hours ÷ paid/available hours. Use 100% when you pay only for client-billed hours.Allocated overhead per billable hourSales, admin and other overhead already allocated across billable hours. Do not include it twice.Target contribution margin after overhead (%)The share of client revenue remaining after all costs entered here. Range: 0–95%.

Client bill rate to meet your target

Know what every billed hour needs to cover.

Calculate to see your target rate, markup, gross margin and contribution after allocated overhead, with a worked cost breakdown.

This is a cost-based planning estimate, not evidence of what a client will pay. No payroll, tax, insurance or benefit costs are assumed. Add applicable business costs yourself; contribution here is before unentered costs and taxes.

Compare community rate benchmarks →

Have a completed engagement? Contribute an actual agreed, invoiced or paid contractor rate. A calculated client billing target is not a contractor rate submission.

Start with a consistent cost basis

Contractor pay and direct delivery costs use a paid/available-hour basis. Overhead uses a billable-hour basis. If your direct costs are already per billable hour, convert them to the paid-hour basis before entering them, or include them once in the per-billable-hour allocation.

A transparent example

With $60 pay, $4 direct costs and 80% utilization, delivery costs $80 per billable hour. Add $10 overhead for $90 total cost. A 25% contribution target requires $90 ÷ 0.75 = $120 per hour. That leaves $40 before overhead and $30 after overhead. These figures illustrate the formula; they are not market benchmarks.

Agency pricing questions

How do I calculate an agency client bill rate?

Add contractor pay and direct delivery costs per paid/available hour, divide by the billable utilization fraction, then add overhead per billable hour. Divide this total cost by one minus your target contribution margin as a decimal. A 25% margin uses a divisor of 0.75, rather than a 25% markup.

When should utilization be 100%?

Use 100% if contractor pay and direct costs are incurred only for hours you bill to the client. Lower utilization is appropriate when you pay for available hours that include time you cannot bill. Do not reduce utilization again if your costs already include that allowance.

What is the difference between gross margin and contribution after overhead?

Here, gross margin is client revenue less utilization-adjusted delivery costs, divided by client revenue. Contribution after overhead also subtracts the allocated overhead you entered. It is not net profit: taxes and any costs you did not enter are excluded.

What is the difference between markup and margin?

Markup here compares the client bill rate with base contractor pay. Margin compares the amount remaining after the specified costs with client revenue. Because the denominators and costs differ, the percentages are not interchangeable.

Are these market rates or recommended margins?

No. The starting numbers are illustrative assumptions. This calculator estimates what your costs and chosen margin require; it does not predict buyer demand or establish a typical agency margin. Historical contractor benchmarks provide a separate source of context.

Does changing currency convert the calculation?

No. USD, GBP, EUR, CAD and AUD control the display only. Enter every cost in the same currency. The calculator does not fetch exchange rates, save your inputs or send their numerical values to analytics.