Agency Hourly Rate Calculator
Tells you the minimum hourly rate your agency needs to charge, based on your target income, overhead, utilisation and profit margin. Free, no signup, includes industry benchmarks.
Agency Hourly Rate Calculator
The minimum hourly rate your agency needs to charge, based on your real numbers.
Your minimum billable rate
$136.55/ hour
Charge less than this and you're losing money on every hour.
Recommended rate (15% comfort margin)
$157.04/ hour
Buffer for scope creep, unbilled minutes, and bad-debt risk.
Breakdown
- Target income
- $120,000
- + Overhead (30%)
- $36,000
- + Target profit (15%)
- $27,529
- = Revenue per person
- $183,529
- ÷ Billable hours/year
- 1,344 hrs
- Break-even rate
- $116.07/hr
Sources: industry benchmarks from AgencyAnalytics 2025 Pricing Benchmark, HubSpot State of Marketing Agencies 2024, Sortlist Agency Operations Survey 2024.
How this calculator works
Most agency owners set their hourly rate by looking at what competitors charge. That is the wrong direction. Your hourly rate should be set by what your P&L actually requires to support the income you want to take home, the overhead the business runs at, and the profit margin you need to reinvest or save.
This calculator does the math in the right order. It takes your target annual income, adds your overhead (rent, software, marketing, non-billable staff), and then targets a profit margin on top of that combined cost base. It divides the resulting total by the billable hours one person can realistically deliver in a year, which is where utilisation matters: nobody bills 40 hours a week every week of the year.
The number it gives you is the floor. Charge less than that and you are losing money on every hour. The recommended rate adds a 15% comfort margin to cover scope creep, unbilled minutes, and the occasional bad-debt write-off.
Frequently asked questions
How does the agency hourly rate calculator work?+
It solves for the minimum billable hourly rate your agency needs to charge based on your target income, overhead percentage, target profit margin, and billable hours per year. It treats profit as a percentage of total revenue, which is how agency P&Ls actually work, so the math is iterative: profit and revenue are solved together rather than profit being added at the end.
What hourly rate should a small marketing agency charge?+
There is no single answer. It depends on your overhead, utilisation, target income and profit margin. The 2024 HubSpot State of Marketing Agencies report puts median small-agency billable rates around $125 per hour in the US, but this varies by region, specialism and seniority. Use the calculator above with your real numbers rather than copying a benchmark.
What is a good billable utilisation rate for an agency?+
Industry targets are typically 70 to 75% of total work hours billable for client-facing staff, according to the Sortlist Agency Operations Survey 2024. Higher utilisation looks good in theory but leaves no margin for admin, business development or recovery from project over-runs.
Should I include overhead in my hourly rate calculation?+
Yes. Overhead is everything that is not direct billable salary: rent, software, marketing, accounting, non-billable team members. If you do not include it in your rate calculation, you are effectively absorbing it from profit, which means your rate is too low. Small agencies usually run 25 to 40% overhead as a percentage of revenue.
How often should an agency raise its hourly rate?+
AgencyAnalytics Pricing Survey 2024 found 73% of agency owners raised rates less often than every 18 months, and most regretted not raising sooner. A practical rhythm is every 12 months for new clients and every 18 to 24 months for existing clients, with the latter framed as an annual scope review rather than a confrontational price increase.
Read the full guide · 8-min read
How to set your agency's hourly rate (and why most agencies under-charge)
The four reasons agencies under-charge, the utilisation trap, and what to do this week.
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