Free tool

Cost Per Billable Hour Calculator

What an hour of each role really costs once employer taxes, benefits, overhead and realistic utilization are in, and the bill rate that clears it. Enter your roles below. Free, no signup and no email wall: your inputs live in the share link, we keep only an anonymous copy of the numbers for benchmarks, and every formula is on the methodology page.

  • No signup, no email wall
  • Inputs live in the share link
  • Anonymous numbers, no name, email or IP
  • Sourced, dated tax defaults

Your firm

Pre-filled with an example consultancy. Replace it with your own roles.

6.2% of salary up to the $184,500 wage base; 1.45% of all salary, no cap; 0.6% of the first $7,000 (6.0% less the 5.4% credit). Calendar year 2026.

Display only. No conversion is applied.

$

Rent, software, insurance, marketing, and the salaries of people who do not bill. Spread over every billable hour.

30%

The margin your bill rates are meant to earn above fully loaded cost.

Working year: 1,840 paid hours per full-time person

Roles

FTE
Salary / year
$
Benefits / year
$
Utilization
%
Employer tax
%
default
FTE
Salary / year
$
Benefits / year
$
Utilization
%
Employer tax
%
default
FTE
Salary / year
$
Benefits / year
$
Utilization
%
Employer tax
%
default
FTE
Salary / year
$
Benefits / year
$
Utilization
%
Employer tax
%
default
4 of 15 roles

Results

Blended cost per billable hour
$94.78
Total cost divided by every billable hour the firm expects to sell
Break-even multiplier
1.95x
Total cost over direct labour: bill below this and the firm loses money
Net multiplier at 30% margin
2.78x
Revenue at target rates over direct labour on billable hours
Revenue at target rates
$2,219,826
16,394 h billable at 74.3% blended utilization

Salary-only versus fully loaded versus per billable hour

The first bar is the shortcut most firms use. The third bar is what an hour you can actually invoice costs.

Break-even and target rates by role

RoleFTESalary / 2,080 hFully loaded / paid hourCost per billable hourUnderstated byBreak-even rateRate at 30% marginMultiplier
Principal1$76.92$108.10$240.23212%$240.23$343.183.95x
Senior consultant3$55.29$83.41$119.16116%$119.16$170.232.72x
Consultant5$40.87$65.99$84.61107%$84.61$120.872.62x
Analyst3$29.81$52.06$63.49113%$63.49$90.702.69x

Understated by: how far the salary-only rate falls short of the cost per billable hour. Break-even rate equals cost per billable hour.

Margin sensitivity: what if utilization moves?

Rates stay at the target rates above. Salaries, tax, benefits and overhead do not change. Only the hours you can invoice move.

Utilization shift, all roles-5 points
Blended utilization
69.3%
Margin at current rates
24.6%
Cost per billable hour
$101.62
Net multiplier
2.78x

A 5-point drop moves margin from 30.0% to 24.6% and revenue by -$159,189.

ShiftUtilizationBillable hoursCost / billable hRevenueMargin
-20 pts54.3%11,978 h$129.72$1,583,0681.8%
-15 pts59.3%13,082 h$118.78$1,742,25810.8%
-10 pts64.3%14,186 h$109.53$1,901,44718.3%
-5 pts69.3%15,290 h$101.62$2,060,63624.6%
0 pts74.3%16,394 h$94.78$2,219,82630.0%
+5 pts79.3%17,498 h$88.80$2,379,01534.7%
+10 pts84.3%18,602 h$83.53$2,538,20438.8%
+15 pts89.3%19,706 h$78.85$2,697,39442.4%
+20 pts93.8%20,700 h$75.07$2,846,57045.4%

Firm rollup

Headcount (FTE)12
Capacity per person1,840 h
Total billable hours16,394 h
Blended utilization74.3%
Salaries$1,116,000
Employer tax$85,878
Benefits$102,000
Overhead$250,000
Total cost$1,553,878
Overhead per billable hour$15.25
Direct labour on billable hours$797,520
Overhead rate on direct labour95%
Break-even multiplier1.95x
Net multiplier at 30% margin2.78x
Revenue at target rates$2,219,826
Gross profit at target rates$665,948

Direct labour is the salary cost of the hours actually billed: salary per capacity hour times billable hours. The net multiplier is the number architecture and engineering firms benchmark against, typically quoted around 3.0.

This is a snapshot. The real number moves every week.

Utilization drifts, people join and leave, overhead changes. SUNAGO Matrix computes each person's cost per billable hour continuously from timesheets and HR data, and reprices every project they are on. Look at it on a seeded firm before deciding anything.

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How the calculator gets to a number

It starts from what a person is paid for a year and works down to what one invoiceable hour costs. Salary is the first line. Employer taxes come next: the statutory on-costs your country charges on top of salary, filled in from official sources for the United States, the United Kingdom and Australia, or as a percentage you enter. Benefits are added at whatever they cost you. That is the loaded cost of the person.

Overhead is then spread across the firm. Rent, software, insurance and the salaries of colleagues who do not bill are divided by every billable hour the firm expects to sell, and each role carries that rate on its own billable hours. A role at 45% utilization therefore carries less overhead in total than one at 80%, but far more per hour it can invoice, which is the point: the same rent is recovered over fewer hours.

Capacity is the paid year minus vacation, public holidays and sick days. Billable hours are capacity times the utilization you expect. Cost per billable hour is fully loaded cost divided by those hours, and it is the break-even rate: bill below it and the hour loses money before any project risk is priced in. The target rate divides by one minus your target margin. The firm rollup adds every role up, weighted by headcount, and reports the net multiplier that architecture and engineering firms use to benchmark pricing.

Every one of those steps, with the exact formula and a worked example, is on the methodology page, together with the source and date of each country's tax default and a list of what the tool deliberately leaves out.

Why the salary-only rate is always too low

Dividing salary by 2,080 hours makes two mistakes in the same direction. It counts hours nobody bills, and it leaves out every cost that is not salary. In the example firm the tool opens with, the consultant's salary-only rate understates the cost per billable hour by 107%. Any margin reported on top of that rate is fiction by the same margin.

The margin sensitivity table shows the second half of the problem. Because salaries, tax, benefits and overhead do not fall when utilization does, a five-point slip in utilization comes straight out of margin at unchanged bill rates. That is why a firm can hit its rate card all year and still end the year thin.

Questions about cost per billable hour

What is cost per billable hour?
Cost per billable hour is what one hour you can invoice actually costs the firm: the fully loaded annual cost of a person (salary, employer taxes, benefits and a share of overhead) divided by the hours they are expected to bill, not the hours they are paid for. It is the number a bill rate has to clear before a project earns anything.
Why not just divide salary by 2,080 hours?
Because nobody bills 2,080 hours. Vacation, public holidays and sick days take the paid year down to roughly 1,800 to 1,900 hours, and utilization takes the billable year down further, often to 1,200 to 1,500. Dividing salary alone by 2,080 ignores employer taxes, benefits and overhead as well, so it understates the real hourly cost by 100% or more for a typical consultant. Every project margin built on that number is flattered by the same amount.
What should go into overhead?
Everything the firm pays that is not the salary, tax or benefits of a billable person: rent, software, insurance, marketing, professional fees, equipment, and the full cost of colleagues who do not bill, such as admin, finance and management time that is not charged to projects. If it is on the profit and loss statement and it is not direct labour, it belongs here.
How do I pick a utilization figure?
Use the share of paid hours the role realistically charges to client projects, taken from timesheets if you have them. Principals and managers typically sit between 40% and 60%; senior staff 65% to 75%; junior staff 75% to 85%. The margin sensitivity slider shows what a five-point miss does, which is usually the more useful number than the estimate itself.
What is a net multiplier and what is a good one?
The net multiplier is net revenue divided by direct labour cost, the ratio architecture and engineering firms use to price and benchmark. The calculator reports the multiplier your target margin implies and the break-even multiplier below which the firm loses money. Published surveys for design firms cluster around 3.0, but the right figure for your firm depends entirely on your overhead rate and target margin, which is why the tool shows both.
What do you keep, and is any of it personal?
Your inputs live in the page URL, which is what the share link carries, so you can reopen them without an account. Once you have changed the example, we keep an anonymous copy of the numbers: role titles, salaries, benefits, utilization, overhead, country, currency and the results. It carries no name, email, IP address or account, is never linked to a person, and is used in aggregate to publish benchmarks on what an hour costs across firms. If you choose to email yourself the results, that address is kept as a contact together with your share link, exactly as the consent text says, and you can ask us to delete it at any time.
Cite this tool

Free to use and to cite. Formulas and country defaults are on the methodology page, methodology version 1.0, dated 1 September 2026.

APA
SUNAGO Matrix. (2026). Cost Per Billable Hour Calculator (Methodology v1.0). https://sunago-matrix.com/tools/cost-per-billable-hour
Harvard
SUNAGO Matrix (2026) Cost Per Billable Hour Calculator, methodology version 1.0, 1 September 2026. Available at: https://sunago-matrix.com/tools/cost-per-billable-hour
Methodology and sources

Every formula, the worked example, the country tax defaults with their official source and the date each was checked, and what the tool leaves out.

Read the methodology