Costing and pricing calculator
How to talk about costing pricing and profits.
Pricing isn’t just a financial decision—it’s a communication tool that influences how clients perceive your value, trust your expertise, and decide whether to work with you. Understanding the psychology behind pricing helps you price more confidently and strategically.
You need to budget and use it as a basis to measure your financial performance. A calculator allows you to set up your budget and update it as required. This will allow you to continually track productivity and profit.
- Working weeks should include 4 weeks annual leave, 2 weeks sick leave and public holidays (these vary from state to state).
- Margin is 20% in most Australian agencies. This gives a buffer on top of your cost rate.
- Profit margin should be at least 20% preferably 30%. This is a target you set and them measure each quarter when you pull a P+L. It should also be checked in job P+Ls.
How to use this calculator
The core of the calculator is based on your budget.
Step 1. Use a P+L from your accounting software to fill out the budget in the calculator. The six categories in the budget have been designed to allow you to manage each cost centre. There is an “Other” if you have expenses not listed in the calculator. If there is more than one other expense add them together.
Step 2. Calculate the number of working weeks in your normal year. Make sure to include a full allowance for sick leave.
Step 3. Set the number of days you work per week. This is the days you are open for client work.
Step 4. Set the number of hours per day you are open for client work.
Step 5. Set the efficiency rate you want to work to. The industry standard is 70%.
Step 6. Set the number of full time equivalent billable staff. If you have 3 designers and one is .5 time you would enter 2.5.
Step 7. All this will give you an hourly cost rate.
Step 8. Enter the margin you want to use. This is the safety net over and above the base cost rate. 20% should be the minimum.
Step 9. Enter the profit margin you want. The minimum should be 30%. This will give you a charge out rate.
Use the calculator below to set your charge out rate
A costing and pricing policy will allow you to generate profit while calculating the return on your team investment.
Business costing and pricing calculator
General and Administrative
| Expense Item | Amount ($) |
|---|---|
| Bank charges | |
| Accounting/legal/consultant fees | |
| Office supplies (incl computer supplies) | |
| Business insurance | |
| Consultants | |
| Professional development | |
| Other | |
| Total general and administrative | $0.00 |
Marketing and Promotional
| Expense Item | Amount ($) |
|---|---|
| Marketing/Advertising | |
| Website hosting and updates | |
| Pro Bono work | |
| Other | |
| Total marketing and promotional | $0.00 |
Operating Expenses
| Expense Item | Amount ($) |
|---|---|
| Newspapers & magazines | |
| Parking/taxis/tolls/parking fines | |
| Entertainment/meals/clients and staff | |
| Travel/accommodation/conferences | |
| Computer lease | |
| Other | |
| Total operating expenses | $0.00 |
Motor Vehicle Expenses
| Expense Item | Amount ($) |
|---|---|
| Fuel | |
| Vehicle service costs | |
| Insurance | |
| Registrations | |
| Other | |
| Total motor vehicle expenses | $0.00 |
Employment Expenses
| Expense Item | Amount ($) |
|---|---|
| Salaries/wages | |
| Superannuation | |
| WorkCover premiums | |
| Other | |
| Total employment expenses | $0.00 |
Occupancy Costs
| Expense Item | Amount ($) |
|---|---|
| Office rental | |
| Telephones | |
| Other | |
| Total Occupancy Costs | $0.00 |
Working Hours
Margin and Profit
Expense Summary
| Category | Amount |
|---|---|
| General and Administrative | $0.00 |
| Marketing and Promotional | $0.00 |
| Operating Expenses | $0.00 |
| Motor Vehicle Expenses | $0.00 |
| Employment Expenses | $0.00 |
| Occupancy Costs | $0.00 |
| Total Expenses | $0.00 |
Results
Total working hours per year:
1,920 hours
Billable hours per year:
1,536 hours
Raw hourly cost:
$0.00
Minimum charge-out rate:
$0.00
Recommended hourly rate:
$0.00
Your recommended hourly rate: $0.00