How this calculator works
Capacity is the annual number of hours you expect to bill, after non-billable work and leave. The multiplier funds benefits, overhead and profit relative to salary. It is a markup factor, not a profit margin. This planning worksheet is in Canadian dollars and has no tax year or prescribed multiplier.
Formula
Bill rate = annual salary x multiplier / annual billable hours. Annual billed revenue = bill rate x billable hours.
Worked example
A $78,000 salary, 1,560 billable hours and a multiplier of 2 require $100 per hour, producing $156,000 in annual billed revenue.
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Frequently asked questions
Is capacity the same as paid hours?
No. Administration, training and business development can be paid without being billable.
Does a multiplier of 2 mean 50% profit?
Only if salary is the entire cost. Benefits, overhead and other costs must also be paid.
Should GST be included?
Use a before-tax bill rate. Add GST/HST separately if required.