The monetary rate assigned per hour — either as a cost rate for team members or a billing rate for client projects.
Two rates matter, and confusing them wrecks your numbers.
Cost rate is what a team member actually costs you per hour. Salary, benefits, taxes — divided by their working hours. A senior developer earning €72,000/year with roughly 1,680 billable hours has a cost rate around €43/hour.
Billing rate is what you charge the client for that same hour. If the project bills at €120/hour, the spread between €43 and €120 is your gross margin on that person's time. Healthy agencies typically maintain a 2.5–3× multiplier between cost and billing rates.
People get raises. Clients negotiate new contracts. A project that started at €95/hour might jump to €110 after a scope revision. If your tool just overwrites the old rate, your historical profitability reports become fiction.
WrkSched uses effective-date rates — when a rate changes, the old one doesn't disappear. February's numbers still use February's rates; March picks up the new ones. Day-by-day lookups mean your profit margins stay accurate even when rates shift mid-project.
Your billing rate has to cover more than the person's cost rate. It also absorbs overhead costs — rent, software, insurance, that espresso machine nobody agreed to buy. If overhead runs €15/hour per person, your actual break-even point on that €43/hour developer is closer to €58/hour.
Set the billing rate too low and you're busy but unprofitable. Set it too high and you lose deals. The spread is where the entire project budget math starts.
Put these concepts into practice with WrkSched — drag-and-drop scheduling and capacity planning.
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