The charge-out rate is the hourly rate you charge your clients for your services. Calculating it accurately is crucial for ensuring your business is profitable and sustainable. This calculator helps you determine your ideal charge-out rate by considering all your business expenses, desired profit margin, and billable hours.
To calculate your charge-out rate, you need to consider:
Direct Costs: Expenses directly related to delivering your service to a client (e.g., materials, specific software licenses for a project).
Indirect Costs (Overheads): Expenses that keep your business running but aren't tied to a specific client or project (e.g., rent, utilities, insurance, marketing, software subscriptions, administrative salaries).
Desired Profit: The amount of profit you want to make on top of your costs.
Billable Hours: The total number of hours you realistically expect to bill to clients in a year. This is NOT the total hours you work, as it excludes time spent on administration, marketing, training, holidays, and sick leave.