Free project profitability calculator for agencies
Calculate project contribution, margin, effective hourly revenue, and cost overruns from delivery hours and cost rates. Download a free CSV worksheet.
Illustrative values from the agency guide. Replace them with your own estimates. All amounts are USD; inputs stay in this page.
- Direct delivery cost
- $5,300.00
- Contribution before overhead
- $2,700.00
- Contribution margin
- 33.75%
- Effective hourly revenue
- $88.89
- Estimated delivery cost
- $4,500.00
- Cost overrun (negative = under estimate)
- $800.00
Contribution excludes general overhead and taxes. Cost rates are your internal costs, not client billing rates. Estimated and actual outside costs are assumed equal here. This is an estimate, not a TrackTimer financial report.
How to calculate project profitability
Subtract direct delivery costs from project revenue to find contribution. Divide contribution by revenue and multiply by 100 for contribution margin. General overhead still needs to be paid from that contribution.
In our worked example, an $8,000 project uses $4,900 of labor and $400 of direct outside costs. That leaves $2,700 contribution and a 33.75% contribution margin. With 90 delivery hours, effective hourly revenue is $88.89.
Compare the estimate with actual delivery
Enter estimated and actual hours for each role using the same internal cost rate. The example's $4,500 estimated cost becomes $5,300 actual cost: an $800 overrun. A negative overrun means you spent less than estimated. At zero revenue or zero hours, the corresponding percentage or hourly rate is undefined.
Read the complete project profitability example, including forecasting remaining effort. TrackTimer reports billable value, team pay, and gross profit from recorded time; this calculator also lets you model fixed fees and direct expenses separately.