Calculate client billing rates from employee cost, overhead multiplier, profit margin, and utilization targets with rate card generation.
This tool works backward from what an employee actually costs the business to what a client should be billed for that employee's time. You enter a base employee cost, an overhead multiplier to cover benefits, taxes, and facilities, a target profit margin, and a utilization percentage representing how much of paid time is actually billable. It combines those into a per-hour billing rate and lays out a rate card across roles. The step people skip is confirming whether utilization is measured against paid hours or scheduled hours, which changes the result.
The base employee cost is first inflated by the overhead multiplier to produce a fully loaded cost per hour. The profit margin is then applied on top of that loaded figure, not the raw wage, so a modest base cost combined with a heavy overhead multiplier can still produce a high billing rate even at a conservative margin percentage.
Utilization scales the loaded cost across only the hours that are actually billable. If a role is targeted at 75% utilization, the tool spreads the employee's full paid cost over that smaller pool of billable hours rather than all paid hours, which raises the effective rate needed to recover the same total cost. Lower utilization targets push the billing rate up.
The billing rate returned is the final client-facing figure with the margin you entered already built into it, since margin is one of the stated inputs combined with overhead and utilization. Applying an additional markup on top would double-count the margin, so treat the output as the rate to quote, not a base to increase.
Either can be entered, but they give different guidance. Actual historical utilization tells you what you need to charge today to hit margin at current performance; an aspirational target tells you what rate would work if utilization improves, which risks under-billing if that improvement never happens. The tool itself does not label which one you supplied.
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