SLA Cost Calculator
Cost the coverage a service level agreement promises.
What this calculator does
Coverage, staffing and rates are entered by the organisation; standby is costed only when both standby hours and a standby rate are given.
Inputs and what they mean
- Currency
- — Amounts are shown in the currency you pick. No exchange rate is applied..
- Covered hours each month
- — For example 730 for 24/7, or 176 for business hours..
- People on duty during covered hours
- — number value.
- Loaded cost per staffed hour
- — number value.
- Standby hours each month
- — Optional component. Leave at 0 to exclude it from the result..
- Standby pay per hour
- — Optional component. Leave at 0 to exclude it from the result..
- Monthly monitoring and tooling cost (optional)
- — Optional component. Leave at 0 to exclude it from the result..
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
SLA cost = Covered hours × People on duty × Loaded rate + Standby hours × Standby rate + Tooling; Cost per covered hour = SLA cost ÷ Covered hours
Worked example
24/7 cover with one person on duty
Standby is counted only when you enter standby hours and pay.
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
Results depend entirely on the figures you enter and are rounded for display. They are for general information and education, not professional advice.
Reference: Rice University — Principles of Accounting, Volume 2: Managerial Accounting
Last reviewed:
Common questions
Formula, source and verification
Coverage is costed as staffed hours, with optional standby pay and tooling added.
The question it answers: What does it cost each month to staff the cover our SLA promises?
The formula
SLA cost = Covered hours × People on duty × Loaded rate + Standby hours × Standby rate + Tooling; Cost per covered hour = SLA cost ÷ Covered hours
- H — Covered hours per month
- (h). Hours the service level has to be met.
- p — People on duty
- (count). People required during covered hours.
- r — Loaded cost per staffed hour
- (currency/h). Employer cost per hour on duty.
- Hs — Standby hours
- (h). Optional standby hours each month.
- rs — Standby rate
- (currency/h). Optional standby pay per hour.
- S — Tooling cost
- (currency). Optional monitoring and tooling cost.
Units: Hours; counts; currency per hour; currency.
What kind of calculation this is
Deterministic formula. The same inputs always give the same answer. The maths is fixed and does not depend on judgement.
Method
Coverage, staffing and rates are entered by the organisation; standby is costed only when both standby hours and a standby rate are given.
Assumptions built into the result
- Mathematical: Staffing is constant across covered hours.
Figures this calculator will never guess for you
- No industry-average rate, margin, overhead or ticket volume is inserted.
- No optional component is filled in on the user's behalf.
- No standard shift pattern or standby premium is assumed.
Limitations
- Costs coverage, not the probability of meeting a response target; that needs demand modelling.
Source and version
- Standard or reference
- Cost accumulation, cost-plus pricing, margin and markup (OpenStax, Principles of Accounting Volume 2: Managerial Accounting — job order costing, cost-plus pricing, margin and markup.)
- Published source
- Rice University — OpenStax (CC BY)
- Formula version
- Version 1
- Verification
- Reviewed against the cited source on
- How much weight the source carries
- Academic
- Applies to
- Currency
- Amounts stay in the currency you choose; no exchange rate is applied.
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