Billing rate and multiplier calculator
A billing rate is direct labor cost per hour times a multiplier. The breakeven multiplier is one plus the overhead rate: below it, every billed hour loses money. Add a profit markup and you get the target multiplier. Enter a salary, overhead rate and profit to see both rates.
Result
Billing rate per hour, $117.50
- Billing rate per hour
- $117.50
- Target multiplier
- 2.875x
- Breakeven rate per hour
- $102.18
- Breakeven multiplier
- 2.5x
- Direct labor cost per hour
- $40.87
Runs in your browser. Nothing you type is sent or stored.
The formula
Billing rate = (salary / paid hours) x (1 + overhead rate) x (1 + profit)
Terms
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Common questions
- Overhead rate is total indirect cost (rent, benefits, payroll taxes, unbilled time, software, insurance and so on) divided by direct labor cost for the same period. Your accountant or your year-end financials can supply both figures.
- This calculator gives the multiplier you set out to bill at. The effective multiplier is what you actually achieved: net service revenue divided by direct labor cost. Write-downs, fixed fees that ran over, and unbilled time pull the effective figure below the target.
- No. The calculator runs in your browser. Nothing you type is sent anywhere or stored.
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