Free tool
Project Profitability & Margin Calculator
See the real profit and margin on a project or client — not just the hours. Enter your bill rate, cost rate, and hours.
Calculate profit & margin
What you charge the client per hour. For fixed-price work, divide the fee by the hours.
What the work costs you per hour — the loaded cost of whoever does it.
Hours worked on the project or for the client.
Gross margin
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Enter your rates and hours to see profit and margin.
- Revenue
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- Cost
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- Profit
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01
What is project profitability?
Profitability is what's left after the cost of doing the work is taken out of what you billed. Hours alone don't tell you this — two projects with the same hours can have very different margins once you account for who did the work and what they cost. The gap between your bill rate and your cost rate, across the hours, is your profit.
The formula
Profit = (bill rate − cost rate) × hours · Margin = profit ÷ revenue × 100
Revenue is bill rate × hours; cost is cost rate × hours. Margin expresses profit as a share of revenue, so you can compare projects of different sizes.
A worked example
At a 150 bill rate and a 90 cost rate over 100 hours: revenue 15,000, cost 9,000, profit 6,000 — a 40% margin.
02
Why the cost rate matters
Most time trackers only capture what you bill, so they can show revenue but never true profit. Pairing a cost rate with every hour is what turns "hours tracked" into "money made" — and reveals which clients and projects actually pay.
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Frequently asked questions
How do you calculate project profitability?
Subtract the cost of the work from the revenue. Revenue is your bill rate × hours; cost is your cost rate × hours; profit is the difference, and margin is profit ÷ revenue × 100.
What is a good profit margin for a service business?
As general guidance, many service firms aim for a gross margin around 30–50% on delivered work; below ~20% leaves little room for overruns, and a consistently negative margin means the pricing or the cost base needs to change.
What's the difference between bill rate and cost rate?
Bill rate is what you charge the client per hour; cost rate is what that hour costs you (the loaded cost of the person doing the work). The gap between them, across hours, is your profit.
Ready when you are
See profitability on every client, automatically
Timix.AI pairs a cost rate and a bill rate on every entry, so profit and margin roll up live from SubTask to project to client — no spreadsheets, no guessing which work pays.