Agency Charge Out Rate Calculator
Instantly work out the hourly and day rate your agency needs to charge clients, based on salary cost, overheads, utilization, and your target profit margin.
Calculate Your Charge Out Rate
Enter your team costs and utilization below to get an instant, accurate breakdown of the hourly and day rate you should be charging clients to hit your target margin.
Charge Out Rate Estimator
Fill in your cost and utilization details to see your rate breakdown
Gross annual salary for this role
Rent, software, admin, employer costs
Typically 1,800-1,950 hours
Share of hours that are billable
Margin on revenue, not markup on cost
Estimated Charge Out Rate
Breakdown based on cost, utilization, and margin
Charge Out Rate FAQ
Everything you need to know about building, pricing, and understanding your agency’s charge out rates.
A charge out rate is the hourly or daily price an agency bills a client for a team member’s time. It is built up from that person’s salary cost, a share of the agency’s overheads, and a profit margin, divided across the hours they can realistically bill in a year.
Add the annual salary cost to overheads to get a total annual cost. Divide that by the number of billable hours in the year to get a cost per hour. Then divide the cost per hour by one minus the target profit margin to arrive at the charge out rate, which builds the margin into the price rather than just adding it on top.
Most agencies aim for a utilization rate between 65% and 80% for client-facing staff. This accounts for time spent on admin, pitching, training, and internal meetings that cannot be billed directly to a client, so not every working hour in the year is a billable hour.
Markup is a percentage added on top of cost, while margin is a percentage of the final selling price. A 25% markup on a £100 cost gives a £125 rate, but that £25 is only 20% of the final price. Calculating rates using margin ensures the stated profit percentage is accurate against revenue, not just cost.