Bill Rate Calculator

A bill rate is the hourly price a staffing agency charges its client for each hour a placed worker works. It covers the worker's pay rate plus the agency's burden costs (employer taxes, workers' compensation, benefits, overhead) and the agency's markup, which is its gross profit per hour.

Bill rate = pay rate × (1 + markup). For example, a $25.00/hr pay rate with a 50% markup gives a bill rate of $25.00 × 1.50 = $37.50/hr. The $12.50 spread is the agency's gross profit per hour before operating costs.

The pay rate is what the worker receives per hour; the bill rate is what the client pays per hour. The difference between them — the spread — must cover employer burden costs and leave the agency's markup. This calculator shows the spread, the markup percentage, and the margin percentage for any pair of rates.

Markup and margin describe the same dollar spread with different denominators. Markup = (bill − pay) ÷ pay, so it is measured against cost. Margin = (bill − pay) ÷ bill, so it is measured against price. A 50% markup equals a 33.33% margin; a 100% markup equals a 50% margin. Mixing them up is the most common pricing mistake in staffing.

To convert markup to margin: margin = markup ÷ (1 + markup). To convert margin to markup: markup = margin ÷ (1 − margin). For example, 25% markup → 20% margin, and 40% margin → 66.67% markup. The Markup vs Margin tab of this tool converts either direction instantly.

Reported markups vary widely by industry, skill scarcity, and services included, commonly falling somewhere between roughly 25% and over 100%. Light-industrial and high-volume roles tend toward the lower end; specialized, professional, and hard-to-fill roles tend toward the higher end. Treat any published range as a starting point and verify against your local market — this tool is for planning estimates, not pricing advice.

Pay rate = bill rate ÷ (1 + markup). For example, with a $60.00/hr bill rate and a 50% markup, the pay rate is $60.00 ÷ 1.50 = $40.00/hr. Use the Reverse tab when a client gives you a fixed bill rate and you need to know the highest pay rate you can offer.

A burden rate (fully burdened labor cost) is the true hourly cost of employing someone beyond their wage: employer payroll taxes, workers' compensation insurance, benefits, and allocated overhead, expressed per hour. Pricing a bill rate off the raw pay rate alone — without burden — is how agencies accidentally lose money on thin markups.

Typical components are employer payroll taxes (such as FICA, state and federal unemployment), workers' compensation insurance (often a percentage of pay that varies by job risk class), benefits stated per hour (health, retirement contributions, PTO accrual), and overhead per hour (recruiting, compliance, office costs). The Burden tab lets you itemize each one and see the fully burdened hourly cost.

No. The markup first has to cover every burden cost above the pay rate, plus recruiting, sales, compliance, and back-office overhead. What remains is the agency's operating profit, which is much smaller than the headline markup percentage suggests. That is why the Burden tab prices the bill rate off the burdened cost, not the raw pay rate.

Margin is the safer pricing target: pricing off a target margin (bill = burdened cost ÷ (1 − margin)) guarantees your profit percentage holds even as costs move, while a fixed markup percentage shrinks in margin terms as costs rise. Many agencies quote markups to clients but manage the business on margin internally.

Usually yes, but never negotiate below your floor: the fully burdened hourly cost. Knowing your burden rate tells you exactly how far you can move before a placement loses money, and the Reverse tab shows which pay rates remain viable at any negotiated bill rate.

A bill rate calculator prices labor a staffing agency sells to clients: pay rate plus burden plus markup. A freelance rate calculator prices an independent professional's own time: desired salary, billable hours, taxes, and expenses. Different math, different audience — see our freelance rate lab for the freelancer side.

A salary-to-hourly calculator converts one person's compensation between pay periods (annual salary ↔ hourly wage, overtime, paychecks). A bill rate calculator starts from that hourly pay rate and layers on employer burden costs and agency markup to produce the price charged to a client. See our salary hourly calculator for the conversion step.