Bill Rate Calculator — Contractor & Staffing Billing Rate
Calculate the bill rate (what you charge clients) from a worker's pay rate, overhead burden costs, and your target gross margin or markup. Instantly see the pay, overhead and profit split, plus annual revenue projection.
$/hr
%
Profit method
%
hrs/yr
Rate to charge the client per billable hour
$39.06
Bill RatePay
64%
Overhead
16%
Profit
20%
- 1
Loaded cost (pay + overhead)
25 × (1 + 25 % ÷ 100) = 31.25Pay rate with overhead burden added. - 2
Bill rate (margin method)
31.25 ÷ (1 − 20 % ÷ 100) = 39.06
How does this calculator work?
Bill Rate = (Pay × (1 + Overhead%)) ÷ (1 − Margin%) for margin method, or × (1 + Markup%) for markup method. Margin and markup differ: 20% margin ≠ 20% markup. Enter pay rate, burden rate and target profit to see the full cost breakdown and annual revenue at once.
Formula
How this is calculated
The bill rate is the hourly amount charged to a client for a contractor, temporary worker or consultant. It must cover three components: the worker's pay rate, the overhead burden, and a profit margin. The overhead (also called the burden rate) typically includes employer payroll taxes (social security, unemployment insurance), mandatory benefits, general administrative costs, and sometimes workers' compensation insurance — commonly 20–35% of pay in the United States as of 2024.
There are two standard ways to add profit: the markup method and the margin method. With markup, profit is expressed as a percentage of cost (pay + overhead), so a 20% markup on a $31.25/hr cost gives a $37.50 bill rate. With margin, profit is expressed as a percentage of the bill rate (revenue), so a 20% margin means profit accounts for 20% of whatever you charge — requiring a higher bill rate ($39.06 for the same cost). Margin percentages therefore always appear smaller than the equivalent markup percentage for the same dollar profit, which is a common source of confusion.
The gross margin and markup shown in the stats let you compare and convert between the two conventions. The donut chart breaks the bill rate into its three components so you can see at a glance where each dollar goes. The annual revenue and profit figures scale the hourly numbers by the billable hours you enter.
Frequently asked questions
Markup is profit as a percentage of cost; margin is profit as a percentage of revenue (bill rate). The same dollar profit gives a larger markup percentage than margin percentage. For example: pay $25, cost $31.25, bill rate $39.06, profit $7.81. Markup = 7.81/31.25 = 25%; margin = 7.81/39.06 = 20%.
In the US (2024 estimates), employer overhead typically runs 20–30% of pay: payroll taxes (FICA, FUTA, SUTA) ≈12–15%, workers' comp ≈1–5%, benefits ≈5–15%, admin ≈3–5%. Knowledge-work and healthcare staffing often run higher. Always verify actual costs with your payroll provider.
Industry norms vary by segment: light industrial staffing typically targets 15–25% gross margin; professional/IT staffing 20–35%; executive search and consulting 30–50%+. Higher-skilled or harder-to-fill roles command higher margins. Your target should also account for fixed overhead and desired net profit.
Also known as
TG we-Calculate Editorial Team. (2026). Bill Rate Calculator — Contractor & Staffing Billing Rate [Online calculator]. TG we-Calculate. https://we-calculate.com/calculator/bill-rate-calculator
TG we-Calculate Editorial Team. "Bill Rate Calculator — Contractor & Staffing Billing Rate." TG we-Calculate. 2026. https://we-calculate.com/calculator/bill-rate-calculator.
TG we-Calculate Editorial Team, "Bill Rate Calculator — Contractor & Staffing Billing Rate," TG we-Calculate, 2026. [Online]. Available: https://we-calculate.com/calculator/bill-rate-calculator
@misc{wecalculate_bill_rate_calculator, title = {Bill Rate Calculator — Contractor & Staffing Billing Rate}, author = {{TG we-Calculate Editorial Team}}, howpublished = {\url{https://we-calculate.com/calculator/bill-rate-calculator}}, year = {2026}, note = {TG we-Calculate} }
Did this calculator help you?