Charge-Out Rate Calculator

Calculate what to charge clients for your employees and subcontractors

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Wages or salary per hour

NI, pension, etc.

Typically 13.8% (Employer's NI) plus pension contributions

Share of business costs

Van, tools, insurance, office costs attributed to this person

Profit on this resource

Typical margins are 20-35% for trade businesses

Recommended Charge-Out Rate
£0.00
per hour
Base Hourly Cost
£0.00
Employer Costs
£0.00
Total Hourly Cost
£0.00
Profit per Hour
£0.00
If this person works 1,600 billable hours per year:
Total Revenue Generated
£0
Annual Profit Contribution
£0

Understanding Charge-Out Rates

Your charge-out rate must cover employee costs, overheads, and generate profit. Many businesses undercharge and struggle to grow.

What to Include in Costs

  • Base wages - Employee's gross hourly pay
  • Employer's NI - 13.8% on earnings above £9,100/year
  • Pension contributions - Minimum 3% employer contribution
  • Holiday pay - 5.6 weeks (28 days) statutory minimum
  • Overheads - Vehicle, tools, insurance allocated to this person
  • Training and PPE - Ongoing certification and equipment

Common Mistakes to Avoid

  • Forgetting employer costs - NI and pension add 15-18% to wages
  • Not allocating overheads - Each person needs a share of fixed costs
  • Insufficient profit margin - 20-35% margins are typical for sustainable growth
  • Assuming all hours are billable - Account for downtime, training, sickness

Rule of Thumb

A common guideline: your charge-out rate should be 2-2.5x the employee's hourly wage to cover all costs and generate healthy profit. This calculator helps you do it precisely.

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