Margin per client after delivery costs. The Agency Profit Margin Calculator takes monthly fee from the client, hours spent per month, internal cost per hour, other direct costs (tools, media, freelancers) and returns client margin plus monthly profit on the client, delivery cost. Results update as you type, and the formula is shown under the result so you can repeat it in your own spreadsheet.
For freelancers and agencies the scarce resource is billable time. Pricing has to cover unpaid hours, tools, taxes and time off, not just the hours a client sees on an invoice. Use the worked example below to check the maths against your own figures.
How the Agency Profit Margin Calculator works
Healthy agencies keep 20–30% after delivery costs on each client. Time tracking is the only way to know the hours figure; clients that quietly consume extra hours are the usual reason margins disappear.
Worked example
With the example values (monthly fee from the client of $10,000, hours spent per month of 120 hours, internal cost per hour of $45, other direct costs (tools, media, freelancers) of $800), the client margin is 38%; monthly profit on the client $3,800.00, delivery cost $6,200.00. Change any figure above and the result updates immediately; use Copy results to paste the summary into a note or email.
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Frequently Asked Questions
How is client margin calculated?
margin = (fee − hours × cost per hour − other costs) ÷ fee.
Which figures do I need?
Monthly fee from the client, hours spent per month, internal cost per hour, other direct costs (tools, media, freelancers). Take them from the same period and the same set of accounts or reports so the ratio is consistent, and check the example values as a guide to the units expected.
How do I choose the target income or margin?
Start from what you need to earn after tax and expenses, add a margin for unpaid time (sales, admin, holidays, slow months) and check the resulting rate against what your market pays.
