Project Margin Calculator
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Result
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This free project margin calculator shows whether a client project made money. Enter the project revenue, total hours spent, your internal cost per hour and any other project costs. You get the profit margin, labor cost and effective hourly rate for that one job. Built for agencies, studios and freelancers. Free, no sign-up, runs in your browser.
Enter your numbers below
Your output will appear here.
See the profit margin on a single client job, not a blended number for the whole business.
Turns total hours and internal cost per hour into the real labor cost of delivering the project.
Shows what the project actually earned per hour worked, so you can compare it with your quoted rate.
Every result comes with the formula explained, and one click copies the figures into a report.
Three steps from a blank form to a result you can use.
Fill in Project revenue, Total hours spent, Internal cost per hour and Other project costs. Example defaults show how it works.
The calculator shows profit margin, labor cost and effective hourly rate with a full breakdown and formulas.
Copy the results into a project review, or change the hours to see where the project would break even.
Project margin is the share of a project's revenue left after paying for the time and costs needed to deliver it. It tells you which clients and project types actually pay.
The math follows the usual project profitability steps. We list them so you can check any result by hand.
| Step | Formula |
|---|---|
| Labor cost | Total hours spent × internal cost per hour |
| Total project cost | Labor cost + other project costs |
| Project profit | Project revenue minus total project cost |
| Profit margin | Project profit ÷ project revenue × 100 |
| Effective hourly rate | Project revenue ÷ total hours spent |
The effective hourly rate matters most on fixed fee work. You may have quoted a project at $120 an hour, but if the team spent twice the planned hours, the project earned $60 an hour.
Example: This is an illustration, not real client data. An agency charges a fixed $12,000 for a small website. The team logs 110 hours. Its internal cost per hour is $55. It also pays $1,200 for a contract copywriter and stock photos.
Now suppose revisions push the hours to 150. Labor cost rises to $8,250, profit falls to $2,550, margin drops to 21.3% and the effective hourly rate falls to $80. We suggest running this check at the halfway point of every fixed fee project, not only at the end.
The margin is only accurate if your internal cost per hour is. It is the cost of the person doing the work, not your bill rate. A common way to work it out:
A person who costs $100,000 a year works out at about $48 an hour on 2,080 hours. If several people with different costs worked on the project, use a weighted average, or run the calculator once per role and add the labor costs.
Rent, admin staff and company software are overhead, not project cost. Leave them out of Internal cost per hour unless you deliberately want a fully loaded rate, and say which one you used when you share the result.
A general profit margin calculator looks at a whole business or product line: revenue, cost of goods and operating expenses for a period. This calculator looks at one client project and builds the cost from hours. Use it to compare projects, clients and pricing models. Use a profit margin calculator for the full business view.
We suggest running both. The project view shows which clients and project types earn their keep. The business view shows whether those project margins are high enough to cover rent, admin and the rest of your overhead.
Quick answers about the Project Margin Calculator.
Multiply total hours by internal cost per hour to get labor cost, add other project costs, and subtract the total from project revenue. Divide that profit by revenue and multiply by 100. A $12,000 project with $7,250 of total cost has a project margin of 39.6%.
It is project revenue divided by the total hours your team spent on the project. It shows what the work really earned per hour, whatever rate you quoted. On fixed fee projects it falls every time hours run over, which makes it a quick warning sign for scope creep.
Enter what an hour of your team's time costs you. A simple method is yearly salary plus benefits and commissions, divided by about 2,080 paid hours. Someone costing $100,000 a year comes to roughly $48 an hour. Do not use your bill rate, which is what the client pays.
A profit margin calculator measures a whole business or product line using revenue, cost of goods and operating expenses. This project margin calculator measures one client project, building labor cost from hours and internal cost per hour. Use it to compare clients, projects and pricing, and the other for the full business view.
Yes. Enter what you billed as Project revenue and the hours worked. If you bill every hour at one rate, the effective hourly rate equals that rate, and the margin shows the gap between your bill rate and cost rate. Unbilled hours lower the effective rate.
Yes. It is free, needs no account and runs in your browser, so your project numbers are not sent anywhere. There are no usage limits. Copy the results before you leave the page, because the calculator does not save past projects or keep a history of earlier calculations.
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