Engine 04 • Commercial Pricing

Billable Rate Engine

Calculate required minimum hourly rates based on net targets, overheads, taxes, and billable utilisation.

£85,000
£18,000
25.0%
15.0%
25 hrs/wk
46 Weeks
Minimum Target Billable Rate
£133/hr
Target Gross Revenue
£154,510
Annual Billable Hours
1,150 hrs
Day Rate Target (8h)
£1,064/day
Total Tax Allocation
£28,333
Retained Profit
£23,177
Utilisation Rate
62.5%
Revenue Breakdown Allocation
Net Salary
Tax
Overhead
Profit

Commercial Rate Architecture

Understanding the components required to price professional services sustainability and protect margins.

⏱️ The Utilisation Gap

Full-time work consists of 2,080 annual hours, but client-billable time is rarely 100%. The remaining time covers essential non-billable business operations.

  • Billable Output Client deliverables & billable tasks
  • Non-Billable Time Sales, admin, CPD & marketing
  • Realistic Benchmark 20 - 30 billable hrs/week

💼 Business Overhead Allocation

Your rate must account for fixed operating costs before you draw a single pound of income or retain commercial profit.

  • Fixed Overheads Software, insurances, subscriptions
  • Variable Expenses Travel, equipment, subcontracting
  • Tax Provisions National Insurance, VAT & Corp Tax

📈 Commercial Margin Buffer

Pricing solely for take-home pay leaves no buffer for lean periods. Retained business profit funds growth, reserves, and scaling.

  • Gross Revenue (Take-Home + Tax + Overhead) / (1 - Margin)
  • Retained Profit Goal 10% - 20% of Gross Revenue
  • Day Rate Model Hourly Rate × 8 billable hours