Free Tool
Agency Hourly Rate Calculator
Calculate what you actually need to charge per hour to cover costs, hit your margin target, and build a profitable agency.
Your numbers
$75,000
Blended average across all billable roles
1.5x
Benefits, rent, tools, insurance (typically 1.3-1.8x)
35%
Net margin after all costs (target 25-40%)
75%
% of available hours that are billable
10
Billable team members
Your rate
Required Hourly Rate
$120/hr
to hit 35% margin at 75% utilization
Cost Per Billable Hour
$78/hr
break-even rate
Fully-Loaded Cost
$112,500
per person/year
Revenue Per Person
$173,077
1,440 billable hrs/yr
Profit Per Person
$60,577
per year
Total Annual Revenue
$1,730,769
$605,769 profit
vs "2.5x Salary" Rule of Thumb
+$324,519/yr
The 2.5x rule gives $98/hr — you need $120/hr to actually hit 35% margin
Break-even$78/hr
2.5x salary rule$98/hr
Your required rate$120/hr
How we calculate this
- Fully-loaded cost = salary x overhead multiplier (includes benefits, rent, tools)
- Cost per billable hour = fully-loaded cost / (available hours x utilization rate)
- Required rate = cost per billable hour / (1 - target margin %)
- Available hours = 40 hrs/wk x 48 weeks (accounting for PTO/holidays)
- 2.5x salary rule = average salary / 2,080 hours x 2.5 (common but often inaccurate)
Know your real cost per hour
Track utilization by role, see actual vs target rates, and price with confidence.