Agency Project Margin Calculator

Frequently Asked Questions

What is a good gross margin for an agency project?

Most healthy agencies target 40 to 50 percent gross margin per project. Below 30 percent is a warning sign that pricing is too low, scope is creeping, or the wrong people are doing the work.

How is the effective hourly rate calculated?

Project revenue minus pass through expenses, divided by total team hours. Pass through expenses are excluded because they are billed at zero margin and would distort the true rate your team earned.

What should I use as an hourly cost rate for a salaried employee?

Divide fully loaded annual cost (salary plus benefits, payroll taxes and bonuses) by billable hours per year, typically 1200 to 1500. For a 100000 salary with 30 percent load and 1300 billable hours, the cost rate is 100 per hour.

What does the overhead multiplier cover?

Rent, software, insurance, admin staff, marketing and other costs that are not tied to a single project. Agencies commonly use 20 to 40 percent of direct labor cost as a simple allocation method.

Is my data stored anywhere?

No. All calculations run in your browser. Saving a client stores one project in your browser local storage only; nothing is uploaded to a server.

Why is my project flagged if it is slightly under 30 percent margin?

Margins under 30 percent leave almost no room for scope creep, write offs or late payments. Flagging early lets you renegotiate scope, adjust the team mix or raise the fee before the project goes underwater.