Agency Margin Calculator
See what a client project leaves you: margin, gross profit and the effective fee per team hour, from the fee, team hours and third-party costs.
- Free
- No sign-up to try
- Works as you type
Agency project margin
Project margin
51.2%
Gross profit
$20,500
Delivery cost
$19,500
Effective fee per team hour
$123.33
- Delivery cost = team hours × team cost per hour + third-party costs.
- Gross profit = fee − delivery cost.
- Margin = gross profit ÷ fee × 100.
- Effective fee per hour = (fee − third-party costs) ÷ team hours.
Free, no sign-up to try. Save it as a live calculator you can share; an estimate from the numbers you enter, not financial advice. Check the result against your own records before you rely on it.
How it works
How the Agency Margin Calculator works
- 1
Enter your numbers
Every result updates as you type, with the formula shown under it.
- 2
Check the method
See how each number is worked out and what it assumes.
- 3
Save it as a Room
Share a live calculator: others can change the numbers and see the result update.
Worked example
What it makes
Example inputs
- Project fee
- $40,000
- Team hours on the project
- 300
- Average team cost per hour
- $55
- Third-party costs (freelancers, media, licences)
- $3,000
Results
- Project margin
- 51.2%
- Gross profit
- $20,500
- Delivery cost
- $19,500
- Effective fee per team hour
- $123.33
How it's calculated
- Delivery cost = team hours × team cost per hour + third-party costs.
- Gross profit = fee − delivery cost.
- Margin = gross profit ÷ fee × 100.
- Effective fee per hour = (fee − third-party costs) ÷ team hours.
- Assumes: Team cost per hour is what an hour costs you (pay plus on-costs), not what you bill.
- Assumes: Overheads such as rent and management time are not included unless you add them to the hourly cost.
An estimate from the numbers you enter, not financial advice. Check the result against your own records before you rely on it.
Who it's for
Who uses it
Agency owners
Check a project's margin before you send the quote.
Account leads
See what extra hours on a fixed fee do to profit.
Finance
Compare margins across projects on the same basis.
Good to know
What to consider
- Use what an hour costs you (pay plus on-costs), not your bill rate, or the margin will look too high.
- Overheads such as rent and management time are not included unless you add them to the hourly cost.
Questions
About the Agency Margin Calculator
Why show the effective fee per hour?
It is the fee left after third-party costs, divided by the hours your team spent. When a fixed-fee project overruns, this number falls below your normal rate, which is often the first sign the project lost money.
Can I share the calculator with my team or a client?
Yes. The Room keeps the calculator live: anyone with the link can change the numbers and see the result update, with the method and assumptions on the same page.
Make your calculator now
Free, no sign-up to try. It becomes a Room you can edit, publish and share.
Create my calculatorRelated
Related tools
- Project Cost EstimatorEstimate a project's cost from the hours and rates of three roles, other costs and a contingency, and share it with your team or client.
- Utilization Rate CalculatorWork out your team's billable utilization and what reaching your target rate would add in revenue each year.
- Profit Margin CalculatorWork out gross margin, net profit and net margin from revenue and costs.