Free tool · Agency rate calculator
What Should Your Agency Really Charge Per Hour?
Most agencies undercharge — not because they lack confidence, but because the math is harder than it looks. Plug in your real numbers and find your floor rate in under a minute.
Rate-setting is harder — than it looks
A simple “what should I charge per hour?” hides three questions at once: what does delivering the work actually cost, what does running the business that delivers it cost, and how much profit do you want to keep when the invoice clears?
Hidden overhead
Rent, software subscriptions, finance, HR, and the time it takes to keep the lights on. A team that bills 70% of capacity still pays 100% of its overhead — but most rate cards only price the billable bit.
Profit ≠ revenue
A 20% margin on revenue means different things depending on your cost base. “I take home 20%” and “the business retains 20%” are not the same number, and confusing them is how agencies underprice for years.
Non-billable hours
Pitch work, internal reviews, training, admin, sick days, dead weeks. A senior designer on a 40-hour week rarely bills more than 1,400 hours in a year — your hourly cost has to absorb the rest.
You can’t price by comparing yourself to other agencies — their cost base is invisible to you. You can’t price to what the client expects — that’s an arbitrary anchor set by whoever quoted them last. The only rate that survives a soft quarter is one your own math supports.
The calculator below works the math backwards: from the cost of an hour, through your real overhead, to the margin you want to retain. The output is the floor — the minimum you can charge without quietly subsidising the project from somewhere else in the business.
Calculate your minimum billable rate
Adjust the sliders to match your agency's real numbers. The bar below the result shows where every dollar of revenue goes — delivery, overhead, and profit.
Fully-loaded cost per billable hour
Operating costs as % of revenue
Profit you want to keep
You should charge at least
$136
per billable hour
- Delivery$75
- Overhead$34
- Profit$27
Annual revenue per biller
$190,909
at 1,400 billable hours/yr
Annual profit per biller
$38,182
at your target margin
Formula: required rate = hourly cost ÷ (1 − overhead% − margin%). Annual revenue and profit assume 1,400 billable hours per year per biller — adjust upward for high-utilisation teams, downward for senior staff in pitch-heavy agencies.
How to get the most — out of this calculator
The calculator is only as honest as the inputs. Spend ten minutes pulling the real numbers from your books before you trust the output.
Enter your real hourly cost
Take a representative team member's fully-loaded annual cost — salary, employer taxes, benefits, equipment — and divide by the hours they actually bill in a year, not the hours they work. For most agencies, that's between 1,200 and 1,500 hours.
Set your overhead percentage
Add up everything that isn't direct delivery: rent, software, finance, ops, marketing, sales, partner time, training. Express it as a share of revenue. Most agencies sit between 20% and 35%; agencies with heavy new-business motion run higher.
Choose your target margin
This is the profit you want the business to keep after delivery and overhead. For a healthy, owner-operated agency, 15–25% net margin is a reasonable target. Below 10% and you've built yourself a job, not a business.
Read the result as your floor
The number the calculator returns is the minimum viable rate — the price at which a billable hour pays for itself, covers its share of overhead, and contributes your target margin. Charging less means subsidising the work from somewhere else.
Common questions about — agency rates
Practical answers, drawn from working with hundreds of agency owners. Still stuck? Book a walkthrough and we’ll go through your numbers together.
What’s a healthy net margin for a creative agency?
Independent benchmarks (SoDA, Promethean, AdAge surveys) consistently put healthy independent agency net margin at 15–25%. Anything north of 25% usually means you’re either undersized, specialised, or undercounting overhead. Below 10% is a red flag — at that level you have no buffer for client churn, slow pay, or a soft quarter.
Should I charge a different rate for different roles?
Yes, but not because seniors are “more valuable” — because their fully-loaded cost is different. Calculate the floor rate for each role independently (junior designer, senior strategist, ECD) and then decide whether you want to blend them on the rate card or expose them. Blended rates are simpler to sell; banded rates are easier to defend on margin.
What if my calculated rate is above market?
First, sanity-check the inputs. Overhead above 40% or billable hours below 1,000 are warning signs that the underlying business model needs fixing, not the rate. If the math is right and you still come in high, you have three options: tighten overhead, raise your billable utilisation, or accept lower margin on certain work. Discounting below the floor without changing the inputs just loses money on every project.
How is hourly rate different from salary?
Your hourly cost is salary plus everything that comes with employing someone — payroll tax, benefits, equipment, paid time off — divided by their billable hours. Your hourly rate is what you charge the client. The gap between them isn’t profit; it’s where overhead and margin live. Pricing at salary cost ÷ working hours is the single most common mistake new agency owners make.
How often should I recalculate my rate?
At minimum once a year, ideally at the start of your fiscal year. Recalculate immediately whenever you make a significant hire, sign or end a major office lease, change health benefits, or notice utilisation has shifted by more than five points. Rates set in 2022 are almost certainly wrong in 2026.
Does this work for fixed-price projects too?
Yes — fixed-price is just an hourly rate with the hours hidden. Estimate the hours by role, multiply by the floor rate for each role, then add a buffer for scope risk (typically 10–20%). If you can’t justify the project price as hours × rate plus risk, you’re guessing.
Your rate is the floor — Multiply helps you get more out of every billable hour
Multiply is the AI operating system for creative agencies: one living view of every brand you work on, briefs and proposals drafted with the full account context, and signals from calls and news turned into shippable opportunities. Less time re-reading the account, more time billing against your rate.