Staffing Agency Bill Rate Calculator

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Staffing Agency Bill Rate Calculator

Understanding how to set an appropriate bill rate is crucial for the success of any staffing agency. The bill rate directly impacts your profitability, your ability to attract and retain talent, and your competitiveness in the market. This calculator helps you determine a suitable bill rate by considering various cost factors and your desired profit margin.

How it Works

The bill rate is the amount you charge your client for each hour a contractor works. To calculate it, we need to account for all the costs associated with employing that contractor, plus a profit margin.

  • Contractor's Pay Rate: This is the hourly wage you pay the contractor.
  • Employer Burden (Taxes & Benefits): This includes costs like Social Security, Medicare, unemployment taxes (FUTA/SUTA), workers' compensation insurance, and any benefits you offer (health insurance, PTO, 401k match, etc.). This is often expressed as a percentage of the contractor's pay rate.
  • Operational Overhead: These are your agency's general operating expenses that can be allocated to each contractor, such as office rent, utilities, administrative staff salaries, marketing, software, and recruitment costs. This is also typically a percentage of the contractor's pay rate.
  • Desired Profit Margin: This is the percentage of profit you aim to make on each billable hour.

The formula used is: Bill Rate = (Contractor Pay Rate + Employer Burden) / (1 – Operational Overhead Percentage – Profit Margin Percentage)









function calculateBillRate() { var contractorPayRate = parseFloat(document.getElementById("contractorPayRate").value); var employerBurdenPercentage = parseFloat(document.getElementById("employerBurdenPercentage").value); var operationalOverheadPercentage = parseFloat(document.getElementById("operationalOverheadPercentage").value); var profitMarginPercentage = parseFloat(document.getElementById("profitMarginPercentage").value); var resultDiv = document.getElementById("result"); resultDiv.innerHTML = ""; // Clear previous results if (isNaN(contractorPayRate) || isNaN(employerBurdenPercentage) || isNaN(operationalOverheadPercentage) || isNaN(profitMarginPercentage)) { resultDiv.innerHTML = "Please enter valid numbers for all fields."; return; } if (contractorPayRate <= 0) { resultDiv.innerHTML = "Contractor's pay rate must be a positive number."; return; } if (employerBurdenPercentage < 0 || operationalOverheadPercentage < 0 || profitMarginPercentage = 1) { resultDiv.innerHTML = "The sum of operational overhead and profit margin percentages cannot be 100% or more. Please adjust."; return; } var billRate = totalCostPerHour / (1 – combinedPercentage); // Format the result to two decimal places var formattedBillRate = billRate.toFixed(2); resultDiv.innerHTML = "

Recommended Bill Rate

" + "Contractor's Hourly Pay Rate: $" + contractorPayRate.toFixed(2) + "" + "Employer Burden Amount: $" + employerBurdenAmount.toFixed(2) + "" + "Total Cost Per Hour (Pay + Burden): $" + totalCostPerHour.toFixed(2) + "" + "Recommended Bill Rate Per Hour: $" + formattedBillRate + ""; } .calculator-inputs { margin-bottom: 20px; padding: 15px; border: 1px solid #ccc; border-radius: 5px; background-color: #f9f9f9; } .calculator-inputs label { display: inline-block; width: 250px; margin-bottom: 10px; font-weight: bold; } .calculator-inputs input[type="number"] { padding: 8px; border: 1px solid #ccc; border-radius: 4px; width: 100px; } .calculator-inputs button { padding: 10px 15px; background-color: #4CAF50; color: white; border: none; border-radius: 4px; cursor: pointer; font-size: 16px; } .calculator-inputs button:hover { background-color: #45a049; } .calculator-result { margin-top: 20px; padding: 15px; border: 1px solid #ddd; border-radius: 5px; background-color: #eef; } .calculator-result h3 { margin-top: 0; color: #333; } .calculator-result p { margin-bottom: 8px; } .calculator-result strong { color: #000; }

Example Calculation

Let's say you have a contractor who requires an hourly pay rate of $50.00. You estimate your employer burden (taxes, benefits) to be 30% of the pay rate, and your operational overhead costs to be 20%. You want to achieve a profit margin of 25%.

  • Contractor's Pay Rate: $50.00
  • Employer Burden: 30% of $50.00 = $15.00
  • Total Cost Per Hour (Pay + Burden): $50.00 + $15.00 = $65.00
  • Combined Overhead & Profit Margin: 20% + 25% = 45%
  • Bill Rate = $65.00 / (1 – 0.45) = $65.00 / 0.55 = $118.18

Therefore, in this scenario, your recommended bill rate would be $118.18 per hour to cover all costs and achieve your desired profit margin.

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