Free Tool
Agency Profitability Calculator
Revenue is vanity. Margin is sanity. Calculate your agency's true profitability and see where you stand against industry benchmarks.
Your agency
10
$150/hr
Blended rate across all roles
$75,000
Average across billable team members
30%
Rent, tools, insurance, benefits (typically 25-40%)
70%
% of available hours that are billable
Your profitability
Net Profit Margin
51.6%
Top Quartile — benchmark: 15-25%
Gross Margin
62.8%
benchmark: 50-60%
Annual Revenue
$2,016,000
$1,041,000 net profit
Revenue per Employee
$201,600
benchmark: $150K-$200K
Cost per Billable Hour
$73
vs $150 bill rate
Profit per Person
$104,100
annually
If You Improve Utilization by 5%
+$144,000/yr
Moving from 70% to 75% utilization increases net margin from 51.6% to 54.9%. Same team, same clients, more profit.
Gross Margin62.8% — Healthy
Net Margin51.6% — Top Quartile
Utilization70.0% — Below Average
How we calculate this
- Revenue = team size x billable hours (available hours x utilization) x bill rate
- Gross margin = (revenue - salaries) / revenue
- Total costs = salaries + overhead (% of salaries for rent, tools, benefits, etc.)
- Net margin = (revenue - total costs) / revenue
- Available hours = 40 hrs/wk x 48 weeks (accounting for PTO/holidays)
- Benchmarks based on 2026 SPI Research and Promethean Research data for professional services firms
See your real profitability in real time
Track margins by client, project, and team member. Know your numbers before month-end.