Consulting Bill Rate Calculator
Work out the hourly rate to charge a client so that target margin is met after overhead and non-billable time.
In short
Work out the hourly rate to charge a client so that target margin is met after overhead and non-billable time.
Formula: Cost per billable hour = (Annual salary + Annual benefits + Annual overhead) ÷ (Annual available hours × Utilisation); Bill rate = Cost per billable hour ÷ (1 − Target margin)
What this calculator does
A fully loaded cost per billable hour is divided by one minus the target margin to give the rate that produces that margin. Every cost element is entered by the organisation. The calculator performs no lookup of market rates and applies no default salary, overhead or margin.
Use it to turn Currency, Annual salary, Annual benefits and payroll cost, Annual overhead allocated, and the other shown inputs into a checked result you can compare, copy, or rerun with different assumptions.
The page shows the formula, a numeric worked example, and the assumptions that affect this professional & industry calculation.
Inputs and what they mean
- Currency
- — Amounts are shown in the currency you pick. No exchange rate is applied..
- Annual salary
- — number value.
- Annual benefits and payroll cost
- — number value.
- Annual overhead allocated
- — number value.
- Annual available hours
- — number value.
- Utilisation
- — Share of available hours that is billable..
- Target margin
- — Margin wanted on the billed rate..
How to use it
- Enter your own figures — the calculator never fills in a rate, price or benchmark for you.
- Press Calculate to see the result.
- Read the formula, variables, assumptions and source below the result before you rely on it.
Formula
Cost per billable hour = (Annual salary + Annual benefits + Annual overhead) ÷ (Annual available hours × Utilisation); Bill rate = Cost per billable hour ÷ (1 − Target margin).
Inputs used: Currency, Annual salary, Annual benefits and payroll cost, Annual overhead allocated, Annual available hours, Utilisation, Target margin.
Edge handling: Annual salary is required.; Annual salary cannot be negative.; Annual salary must be no more than 1000000000000.; Annual benefits and payroll cost is required.; Annual benefits and payroll cost cannot be negative..
Worked example
Consultant on $120,000 with 70% utilisation
- Start with Currency: USD, Annual salary: 120000, Annual benefits and payroll cost: 30000, Annual overhead allocated: 50000, Annual available hours: 2080, Utilisation: 70.
- Apply the method: Cost per billable hour = (Annual salary + Annual benefits + Annual overhead) ÷ (Annual available hours × Utilisation); Bill rate = Cost per billable hour ÷ (1 − Target margin).
- Salary, benefits and allocated overhead at a 35% target margin.
Reading the result
The headline figure is the main answer. Any breakdown underneath shows the parts that make it up, so you can check the working and see what changes when you adjust an input.
Limitations and assumptions
- Inputs outside the supported range are rejected rather than forced into a result.
- The result depends on the values you enter for this consulting bill rate calculator; it does not supply missing rates, rules, prices, dates, or assumptions for you.
Reference: U.S. Bureau of Labor Statistics — Employer Costs for Employee Compensation — methodology
Last reviewed:
Common questions
Where does this formula come from?
Employer cost of compensation as defined by the U.S. Bureau of Labor Statistics ECEC methodology. See the source link on this page.
What kind of calculation is this?
A fully loaded cost per billable hour is divided by one minus the target margin to give the rate that produces that margin. Check the formula, example, and limitations on this page before using the result for a real professional & industry decision.
What are its limits?
Produces the rate implied by the inputs; it does not say what a client will accept or what competitors charge. Check the formula, example, and limitations on this page before using the result for a real professional & industry decision.
How do I use the Consulting Bill Rate Calculator?
Enter the required values for Currency, Annual salary, Annual benefits and payroll cost, Annual overhead allocated, Annual available hours, and the other fields shown. The calculator applies the formula on this page and shows the main result with any supporting breakdown so you can check the arithmetic.
What formula does the Consulting Bill Rate Calculator use?
Cost per billable hour = (Annual salary + Annual benefits + Annual overhead) ÷ (Annual available hours × Utilisation); Bill rate = Cost per billable hour ÷ (1 − Target margin) The visible formula section above lists the calculation path and the edge cases the page handles, so the result can be checked without relying on the form alone. Check the formula, example, and limitations on this page before using the result for a real professional & industry decision.
Can the Consulting Bill Rate Calculator be used for exact decisions?
Use it as a calculation aid, not as a substitute for checking the underlying rule, contract, policy, or professional advice that applies to your situation. When a result depends on local rules, personal details, prices, or dates, enter those values yourself and confirm them before acting.
Formula, source and verification
A fully loaded cost per billable hour is divided by one minus the target margin to give the rate that produces that margin.
The question it answers: How much should I charge a client per hour so the work still makes the margin we need?
The formula
Cost per billable hour = (Annual salary + Annual benefits + Annual overhead) ÷ (Annual available hours × Utilisation); Bill rate = Cost per billable hour ÷ (1 − Target margin)
- S — Annual salary
- (currency). Base pay for the person being billed.
- B — Annual benefits and payroll cost
- (currency). Employer-paid benefits, taxes and insurance.
- O — Annual overhead allocated
- (currency). Share of firm overhead allocated to this person.
- H — Annual available hours
- (h). Working hours available before utilisation.
- U — Utilisation
- (%). Share of available hours that is billable.
- m — Target margin
- (%). Margin wanted on the billed rate.
Units: Currency per hour; hours; percentages.
What kind of calculation this is
Business input model. The answer depends on business figures only you can supply, such as your own costs, rates or volumes. No market or benchmark values are assumed for you.
Method
Every cost element is entered by the organisation. The calculator performs no lookup of market rates and applies no default salary, overhead or margin.
Assumptions built into the result
- Mathematical: All figures cover the same twelve-month period.
- Business: Utilisation and margin are entered as percentages of the stated bases.
Figures this calculator will never guess for you
- No market or industry-average bill rate is inserted.
- No default utilisation, overhead or margin is assumed.
Limitations
- Produces the rate implied by the inputs; it does not say what a client will accept or what competitors charge.
Source and version
- Standard or reference
- Loaded-cost rate build-up (Employer cost of compensation as defined by the U.S. Bureau of Labor Statistics ECEC methodology.)
- Published source
- U.S. Bureau of Labor Statistics — ECEC methodology
- Formula version
- Version 1
- Verification
- Reviewed against the cited source on
- How much weight the source carries
- Standards or government
- Applies to
- Currency
- Amounts stay in the currency you choose; no exchange rate is applied.
Cite this page
Free Calculator. (2026, September 15). Consulting Bill Rate Calculator. https://freecalculator.tech/tools/consulting-bill-rate-calculator
"Consulting Bill Rate Calculator." Free Calculator, 15 Sept. 2026, https://freecalculator.tech/tools/consulting-bill-rate-calculator.
Consulting Bill Rate Calculator — Free Calculator, https://freecalculator.tech/tools/consulting-bill-rate-calculator
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