Time, Utilization & Profitability

Cost Rate

Определение

What it actually costs you per hour to have someone do work. For employees: salary + benefits + taxes + overhead, divided by available hours. For an $80K/year employee with $20K overhead working 1,800 billable hours, the cost rate is ~$55/hr. For contractors, it's simply what you pay them.

Почему это важно

If your bill rate is $120/hr and your cost rate is $55/hr, your gross margin is 54%. If you don't know your cost rate, you can't know your margin.

Related Terms

Bill Rate Delivery Margin Overhead

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