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agency pricing calculator

Agency pricing & margin calculator

Most agencies price on gut and discover the margin later. Drop in a fee, the hours it takes, and your blended team cost, and this calculator shows your real gross margin and effective hourly rate instantly - so you know whether a retainer or project is actually worth it.

gross margin33%
effective hourly rate (what you bill)$83/hr
fully-loaded cost$3,375
gross profit / month$1,625
Healthy-ish (30-55%). Room to raise price or cut delivery hours.
what to do
  • To hit a 50% margin, charge $6,750 - or deliver this in 44 hrs at today's fee.
  • Benchmark: agencies target a 50%+ gross margin (UK median recently ~39%).
  • You're billing 1.9x your blended cost rate.
33% margin works - now protect it, live, per client.
Forge builds branded time-tracking & client portals for your agency. No code, no hosting.
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Built with Forge - internal tools for agencies, live in minutes.

how to use it

Four inputs, instant answer

  1. Enter the monthly fee or project price.
  2. Enter the hours you'll deliver per month.
  3. Enter your blended team cost rate and overhead %.
  4. Read your margin, effective hourly rate, fully-loaded cost, and profit - plus a benchmark verdict.
benchmarks

What healthy agency margins look like

Most agencies target 20-35% gross margin; top, productised agencies run 55-60%+ by pricing on value and tightening delivery. If your effective hourly rate is far below your blended cost rate, you're underpricing or over-delivering. The fastest way up is value-based pricing.

20-35%typical agency gross margin
55%+top productised agencies
the method

How the math works

Two formulas, no spreadsheet. Fully-loaded cost is your delivery hours times your blended cost rate, plus overhead - then margin is what's left of the fee after that cost.

fully-loaded cost = hours × blended cost rate × (1 + overhead %)

gross margin = (fee - fully-loaded cost) / fee

A worked example

  • A $5,000/month retainer, 60 hours delivered, $45/hr blended cost, 25% overhead.
  • Fully-loaded cost = 60 × $45 × 1.25 = $3,375.
  • Gross profit = $5,000 - $3,375 = $1,625.
  • Gross margin = $1,625 / $5,000 = 33%. Effective hourly rate = $5,000 / 60 = $83/hr.
  • Nudge the fee to $6,000 for the same delivery and you jump to a 44% margin - try it in the tool above.
price it right, then prove it

Knowing your margin is step one

Protecting it means tracking where hours actually go. Forge builds branded time-tracking and client portals for your agency - so you see margin per client, live, without building or hosting anything. Already pricing work? Pair this with a retainer agreement template and an agency proposal template to lock it in.

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keep reading

Related for agencies

Agency pricing & margin benchmarks

See the sourced margin, utilization and rate benchmarks behind your verdict - by agency type and size.

learn more →

Retainer agreement template

Lock the pricing you just sized into a retainer your clients actually sign.

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Agency proposal template

Win the work with a proposal that frames value and scope, not just hours.

learn more →

Value-based pricing

Price on the outcome you deliver - the route most agencies take to 55%+ margins.

learn more →

Blended rate

What a blended team cost rate is, and how to work out yours for this calculator.

learn more →

Internal tools for agencies

See every tool Forge builds, hosts and runs for agencies - no code, no servers.

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questions

Frequently asked questions

How do you calculate agency gross margin?

Gross margin = (fee - fully-loaded delivery cost) / fee. Fully-loaded cost = hours × blended cost rate × (1 + overhead %).

What is a good profit margin for an agency?

20-35% is typical; 55%+ is excellent and usually comes from value-based pricing and productised services.

What is effective hourly rate?

Your fee divided by the hours delivered - the real rate you're earning, regardless of how you quoted the work.

What is a fully-loaded cost?

Your delivery cost with overhead baked in: hours × blended cost rate × (1 + overhead %). It's the true cost of doing the work, not just salaries.

How do I improve my agency's margin?

Raise prices toward the value you deliver, cut the hours each engagement takes (tighter scope, templates, automation), lower overhead, or move from hourly to productised pricing. Track hours per client so scope creep doesn't quietly eat the margin.

What overhead percentage should I use?

Overhead covers the non-billable cost of employing your team - software, admin, rent, benefits, downtime. 20-40% on top of salary cost is typical; use your own books if you have them.

Should I price per project or on retainer?

Retainers smooth revenue and reward efficiency - you keep the upside when you deliver faster. Projects suit one-off scopes. Either way, size the margin first: use the 'i want a target margin' mode to back into the right price.

design. build. iterate.

See your margin live, per client.

Forge builds branded time-tracking and client portals for your agency - no code, no servers, no setup.

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