Cost & Financial Metrics 4 dk / min

True Loaded Hourly Cost & Margin Calculation Formula

Protect profitability by factoring taxes, overhead allocation, and utilization rates.

The most common mistake in professional service pricing is dividing base net salary by 160 hours.

True Cost Drivers

  1. Fully Loaded Salary: Gross compensation + payroll taxes + mandatory benefits.
  2. Per-Seat Overhead Allocation: Rent, legal, software licenses (Figma, GitHub, Slack) divided across billable headcount.
  3. Annual Billable Utilization: Realistic capacity standardized to 1,600 billable hours after accounting for holidays and bench time.
TEXT
True Hourly Cost = (Gross Loaded Salary + Allocated Overhead) / 1,600 Hours
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