Project margin calculator
Fixed-price work turns every extra hour into a straight reduction in margin.
%
Project margin
28.75%
- Profit
- 7187.50
- Total cost
- 17 812.50
- Effective hourly rate
- 86.96
- Hours after the overrun
- 287.5
- Hours at which you break even
- 418.2
- Hours of headroom left
- 130.7
Show the working
- Project fee = 25 000
- Hours estimated = 250
- Internal cost per hour = 55
- Direct expenses = 2000
- Expected overrun = 15
- Hours after the overrun = 250 * (1 + 15/100) = 287.5
- labour_cost = 287.5 * 55 = 15 812.5
- Total cost = 15 812.5 + 2000 = 17 812.5
- Profit = 25 000 - 17 812.5 = 7187.5
- Project margin = 25 000 > 0 ? 7187.5/25 000*100 : 0 = 28.75
- Effective hourly rate = 287.5 > 0 ? 25 000/287.5 : 0 = 86.9565
- Hours at which you break even = 55 > 0 ? (25 000 - 2000)/55 : 0 = 418.182
- Hours of headroom left = 418.182 - 287.5 = 130.682
Values are shown to six significant figures here; the arithmetic itself runs on exact fractions and is only rounded where a number is printed.
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The formula
- margin = (fee - hours x cost per hour - expenses) / fee