What hourly rate should I charge to stay profitable?
What does the Agency rate calculator do, and who is it for?
Calculate your true hourly rate including overhead.
For: Solo and small agencies
Agency rate calculator
Bill the rate that actually pays you
Most owners price off salary and forget the rest. This calculator layers overhead on top - tools, rent, admin, the hours you spend on the business not in it - then adds your margin so the rate is the floor, not a guess.
+What is the calculation?
Total cost. The salary you want to pay yourself plus the annual overhead your business carries (software, rent, insurance, taxes, non-billable admin).
Billable hours. Locked at 1,000 hours a year. That's about 65% utilisation on a 1,500-hour productive year - the band most operator-led agencies actually hit once meetings, pitching and admin are taken out.
Rate. Cost per billable hour divided by (1 - your target margin), then rounded to the nearest $5 so it reads like a rate, not a spreadsheet cell.
minimum rate to clear your cost and hit margin
- Total cost
- $155,000
- Cost / hr
- $155
- Margin / hr
- $155
Assumes 1,000 billable hours/year. Solo operators often hit closer to 1,200, larger agencies closer to 800 once meetings and admin scale. Adjust the salary slider if you want to mirror a different utilisation.
How this is calculated
The rate is your total cost divided by billable hours, divided by one minus your target margin, then rounded to the nearest five dollars. Total cost is the salary you want plus annual overhead.
Billable hours are locked at 1,000 a year, about 65% utilisation on a 1,500-hour productive year. That sits just under the 70% SPI Research treats as the minimum healthy benchmark, so the rate stays conservative.
Sources
- 2026 Professional Services Maturity BenchmarkSPI Research (Service Performance Insight)509 firms, 160+ KPIs. Healthy billable utilisation 70%+, project margin 35%+, revenue leakage under 5%.
- Billable Utilisation in Professional ServicesHarvard Business ReviewFirms at 75%+ utilisation reach materially higher net margins than those below 60%.
Frequently asked
How do I calculate my agency hourly rate?+
Add the salary you want to your annual overhead to get total cost. Divide by your billable hours for a cost per hour, then divide by one minus your target margin. That is your floor rate.
What utilisation rate should I assume?+
Around 65 to 70% of productive time is realistic once meetings, pitching and admin are removed. SPI Research treats 70% as the minimum healthy billable utilisation.
Should I charge my cost rate?+
No. Cost rate only covers salary and overhead. You add a target margin on top so the business keeps something after everyone is paid, which is what funds growth and risk.
Why does overhead matter so much?+
Overhead is every cost that is not a salary: software, rent, insurance, non-billable admin. Pricing off salary alone is the single most common reason agency owners quietly under-charge.
Operate and grow your agency, the right way.
The only tool your agency needs to run faster with less and make more money.