Calculate the weighted average hourly rate for your project team or service resources.
Weighted Average Blended Rate:
What is a Blended Rate?
A blended rate is a weighted average hourly rate used in project management, legal services, and consulting. Rather than billing clients different rates for every single staff member, a firm provides a single "blended" rate that covers the collective cost of the entire team assigned to the project.
How the Blended Rate is Calculated
The formula for a blended rate takes into account both the specific hourly cost of each person and the amount of time they contribute to the total effort. It is not a simple average of the rates; it is a weighted average based on hours.
The Blended Rate Formula:
Blended Rate = ( (Rate A × Hours A) + (Rate B × Hours B) + … ) / (Total Combined Hours)
Why Use a Blended Rate?
Simplified Invoicing: Clients only see one line item for labor rather than a complex breakdown of every employee's salary.
Predictability: It allows project managers to estimate total costs more accurately based on total effort.
Competitive Bidding: Firms can adjust the mix of senior and junior staff to arrive at a competitive blended rate that meets the client's budget.
Practical Example
Imagine a software project requiring three team members:
Role
Hourly Rate
Hours Assigned
Subtotal Cost
Lead Developer
$180
10
$1,800
UI Designer
$120
20
$2,400
QA Tester
$80
10
$800
TOTALS
–
40
$5,000
To find the blended rate: $5,000 (Total Cost) / 40 (Total Hours) = $125.00 per hour.
function calculateBlendedRate() {
var r1 = parseFloat(document.getElementById('rate1').value) || 0;
var h1 = parseFloat(document.getElementById('hours1').value) || 0;
var r2 = parseFloat(document.getElementById('rate2').value) || 0;
var h2 = parseFloat(document.getElementById('hours2').value) || 0;
var r3 = parseFloat(document.getElementById('rate3').value) || 0;
var h3 = parseFloat(document.getElementById('hours3').value) || 0;
var totalCost = (r1 * h1) + (r2 * h2) + (r3 * h3);
var totalHours = h1 + h2 + h3;
var resultArea = document.getElementById('resultArea');
var blendedOutput = document.getElementById('blendedOutput');
var totalCostOutput = document.getElementById('totalCostOutput');
var totalHoursOutput = document.getElementById('totalHoursOutput');
if (totalHours > 0) {
var blendedRate = totalCost / totalHours;
resultArea.style.display = 'block';
blendedOutput.innerHTML = '$' + blendedRate.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}) + ' / hr';
totalCostOutput.innerHTML = 'Total Project Labor Cost: $' + totalCost.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
totalHoursOutput.innerHTML = 'Total Project Hours: ' + totalHours.toLocaleString() + ' hrs';
resultArea.scrollIntoView({ behavior: 'smooth', block: 'nearest' });
} else {
alert('Please enter a number of hours greater than zero.');
}
}