Is this project actually making money?
Salary cost of the hours spent, not what you billed for them.
Rent, admin, tools — the slice of running the business this project should carry.
Profit on this project
$4,500.00
A healthy services margin is usually 20–40%.
Cost the staff time at what it costs you, not at what you charge for it. Billing rate includes the profit you are trying to measure.
Free Agency Profit Margin Calculator
Put in what the client paid and what the work really cost — staff time, contractors, software and a fair share of overhead — and see the profit and margin. Costing staff at their billing rate is the mistake that hides a loss-making project.
Built by Slashit · Last updated 27 September 2026
What is the agency profit margin calculator?
An agency profit margin calculator answers a question that sounds simple and usually is not: did this project make money? Revenue is easy to see. Cost is where agencies deceive themselves, in two specific ways. The first is costing staff time at the rate they are billed out at, which bakes the profit into the cost and makes every project look break-even. The second is ignoring overhead entirely — rent, admin salaries, software, the hours spent on work that never became a project — so a job that looks profitable is quietly subsidised by everything else. This tool asks for staff time at what it costs you, and for the share of overhead the project should carry, and gives you the number that is left.
How our free agency profit margin calculator works
Enter the revenue
What the client actually paid, excluding tax.
Cost the staff time honestly
The salary cost of the hours spent, not the rate you billed those hours at.
Add contractors and licences
Freelancers, stock assets, plugins, anything bought specifically for this job.
Allocate overhead
The slice of running the business this project should carry — commonly 10 to 20% of revenue.
What can you use the agency profit margin calculator for?
The client everyone dreads
Run their last project through this. Scope creep usually shows up as a margin in single figures.
Before repeating a project type
If one kind of work consistently lands under 20%, either the price or the process needs changing.
Deciding whether to hire
Margins tell you whether there is room to absorb another salary.
Who uses our free agency profit margin calculator?
Agency owners
Finding out which clients are worth keeping and which are quietly costing money.
Project managers
Checking a project against its budget before the final invoice rather than after.
Freelancers with subcontractors
Once you are paying other people, revenue and profit stop being the same thing.
Anyone pricing a retainer
A monthly fee that looked generous can become a loss once the real hours are counted.
Why use the agency profit margin calculator?
Forces the honest cost
Asks for salary cost, not billing rate — the single change that reveals most loss-making work.
Includes overhead
A project that ignores rent and admin is not profitable, it is subsidised.
Immediate margin read
Tells you whether the margin is healthy, thin or hiding a problem.
Tips for getting the best results
Use salary cost, not billing rate
Roughly: annual salary plus employer costs, divided by billable hours. Never the number on the client's invoice.
Count the unbilled hours too
The calls, revisions and 'quick favours' are staff time. Leaving them out is how a project looks profitable and feels awful.
20% is the floor, not the target
Below that, one project going wrong wipes out the profit from several that went right.
Measure per project, not per year
An annual average hides the loss-makers inside the winners.
Frequently asked questions
What is a good margin for an agency?
For services work, 20–40% gross margin per project is a common healthy range. Under 20% leaves very little room for a project that overruns, and consistently above 50% usually means you are underpricing your own time or about to be undercut.
How do I work out my overhead percentage?
Take a year of costs that are not tied to a specific project — rent, admin salaries, software, insurance — and divide by a year of revenue. That percentage is what each project should carry.
Should I include my own salary?
Yes, if you work on the project. Leaving the founder's time out of the cost is the most common way an agency convinces itself it is profitable.
Is this gross or net margin?
Gross margin on the project, with overhead allocated. It does not account for tax, loan repayments or anything below the operating line.
