function calculateAllInclusiveRate() {
// 1. Get input values
var baseRate = parseFloat(document.getElementById("baseHourlyRate").value);
var burdenPct = parseFloat(document.getElementById("burdenPercent").value);
var overheadPct = parseFloat(document.getElementById("overheadPercent").value);
var marginPct = parseFloat(document.getElementById("profitMargin").value);
// 2. Validation
if (isNaN(baseRate) || baseRate < 0) {
alert("Please enter a valid Base Hourly Pay Rate.");
return;
}
if (isNaN(burdenPct) || burdenPct < 0) burdenPct = 0;
if (isNaN(overheadPct) || overheadPct < 0) overheadPct = 0;
if (isNaN(marginPct) || marginPct < 0) marginPct = 0;
// 3. Calculation Logic
// Calculate Cost Components
var burdenAmount = baseRate * (burdenPct / 100);
var overheadAmount = baseRate * (overheadPct / 100);
// Total Cost (Break-Even)
var totalCost = baseRate + burdenAmount + overheadAmount;
// Calculate Profit based on margin of the Total Cost
// Note: Some models calculate margin as % of PRICE, others as Markup on COST.
// Standard "Cost Plus" model uses Markup on Cost.
var profitAmount = totalCost * (marginPct / 100);
// Final All-Inclusive Rate
var finalRate = totalCost + profitAmount;
// 4. Update UI
document.getElementById("displayBase").innerText = "$" + baseRate.toFixed(2);
document.getElementById("displayBurden").innerText = "$" + burdenAmount.toFixed(2);
document.getElementById("displayOverhead").innerText = "$" + overheadAmount.toFixed(2);
document.getElementById("displayBreakEven").innerText = "$" + totalCost.toFixed(2);
document.getElementById("displayProfit").innerText = "$" + profitAmount.toFixed(2);
document.getElementById("displayFinalRate").innerText = "$" + finalRate.toFixed(2) + " / hr";
// Show results
document.getElementById("resultContainer").style.display = "block";
}
Understanding the All-Inclusive Rate
In the world of professional services, staffing, and independent contracting, quoting a simple hourly wage often leads to financial loss. To ensure sustainability, businesses and freelancers must calculate an All-Inclusive Rate (AIR). This rate encompasses not just the money paid to the individual doing the work, but all associated costs of employment, operational overhead, and the necessary profit margin to keep the business viable.
Whether you are a staffing agency pricing a contractor for a client, or a freelancer determining your billable hour, understanding the components of a fully loaded rate is critical.
Key Components of an All-Inclusive Rate
The calculation typically follows a "Cost-Plus" model. Here is a breakdown of the specific variables used in our calculator:
Base Hourly Pay Rate: This is the raw hourly wage paid to the employee or the contractor. It is the foundation of the calculation but does not account for the cost of doing business.
Employment Burden: Also known as the "Load," this includes mandatory payroll taxes (Social Security, Medicare), unemployment insurance, workers' compensation, and benefits such as health insurance or paid time off (PTO). In the US, this typically ranges from 15% to 30%.
Operational Overhead: These are the indirect costs required to run the business that cannot be billed directly to a client. Examples include rent, software subscriptions, legal fees, marketing, and administrative staff salaries.
Profit Margin: The percentage added on top of the total costs (Base + Burden + Overhead) to generate net profit. This capital allows the business to grow, save for downturns, and reward stakeholders.
Pro Tip: When negotiating with clients, an "All-Inclusive Rate" usually implies that there will be no extra charges for travel, expenses, or equipment unless explicitly stated otherwise in the contract.
Why "Break-Even" Analysis Matters
One of the most valuable outputs of this calculator is the Break-Even Cost. This figure represents the absolute minimum amount you must charge to cover the employee's salary plus all taxes and overheads without making a profit or a loss.
If your negotiated billable rate falls below your Break-Even Cost, you are effectively paying the client to work for them. Agencies typically aim for a gross margin of 20-40% above the break-even point to ensure a healthy bottom line.
Example Calculation
Consider a senior developer with a desired base salary equating to $60.00/hour.
Burden (20%): Covers taxes and healthcare ($12.00).
Overhead (10%): Covers laptop and office space ($6.00).
Total Cost: $60 + $12 + $6 = $78.00 (Break-Even).
Margin (25%): Markup for agency profit ($19.50).
Final All-Inclusive Rate: $78.00 + $19.50 = $97.50/hour.
By using this logic, you ensure that every hour billed contributes correctly to your operational stability and growth targets.