Free calculator
Was that project actually profitable?
Revenue looked fine. Put in the hours and what your people cost, and see what was left.
Your project
Example numbersWhat the client agreed to pay. Example: 24,000.
Contractors, stock, software, in one number. Example: 1,800.
What you wanted out of it. Example: 50.
Example result
Gross margin A$4,700, 19.6 percent, Red: under 30%.
Red: under 30%
- Effective hourly rate
- A$104
- Blended cost per hour
- A$76.09
- Total cost
- A$19,300
- Total hours
- 230
To hit 50% you needed to quote A$38,600.
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How this is worked out
Labour cost= for each role, hours × what that person costs you per hour, added up.
Gross margin= quoted fee − labour cost − direct costs. Margin %= gross margin ÷ quoted fee, which is how Handl reports it too.
Effective hourly rate= quoted fee ÷ total hours. Blended cost per hour= labour cost ÷ total hours.
What to quote= total cost ÷ (1 − target margin). Hours of room = how much more the team could have worked, at the blended cost per hour, before margin fell under your target.
Worked example with the Example rows: labour is 5,200 + 10,200 + 2,100 = 17,500, plus 1,800 direct is 19,300 of cost. On a 24,000 fee that leaves 4,700, which is 19.6%. Over 230 hours that is 104.35 an hour, against a 50% target that needed a 38,600 quote.
We colour the margin red under 30%, amber from 30% up to 50%, and green at 50% and over. Those lines are ours, not an industry stat. Move your target to what your agency actually needs. Cost rates are internal numbers: what a person costs you, not what you charge.
Where Handl comes in
Handl tracks cost and billable rates per person and per project, so margin updates as time is logged instead of after the invoice.
Prefer a spreadsheet?
Not sure what your people really cost per hour? The free rate card calculator works out what to charge per hour from what your people actually cost, then checks the rate you really got.
See it on your own projects.
Handl turns logged hours and costs into invoices and a live margin, so you are not rebuilding this in a spreadsheet every time.
Not accounting advice. This is an estimate worked out from the numbers you type in, nothing more.