Understanding the calculation
The work year uses 52 weeks, deducting leave and other non-working working days. Weekly billable hours are adjusted for effective weeks and utilisation. Revenue covers available income and costs, plus tax provision and margin as revenue percentages; both are additional reserves, not the target income. Project fees multiply the rate by project billable hours. Do not duplicate costs already included in provisions.
Revenue = (target income + costs) / (1 − tax provision − margin). Rate = revenue / billable hours.
Worked example
Fictional EUR example: target 30,000, costs 6,000, tax provision 20%, margin 10% → revenue 51,428.57. Five days and 40 hours weekly, 20 leave days, ten other days off, 25 billable hours weekly and 80% utilisation give 920 annual billable hours. Rate: 55.90 per hour; a 20-hour project: 1,118.01.
Assumptions and limits
Tax provision is manual, not a tax, contribution or VAT calculation. The 52-week year is not a local work calendar. Not all hours are assumed saleable or utilisation guaranteed. No billable hours means no rate. Project fees exclude unentered project-specific costs.
Questions about this tool
Does the extra margin replace target income?
No. Target income is what remains after costs and provisions. Margin is a separate revenue reserve; use zero if unnecessary.