Know your cost calculator

Are you charging enough to make a profit? Use the Costs calculator to gain a better understanding of what to charge to cover your costs and grow your business.

Tip sheet

The tip sheet can help you to to reduce the charge-out rate if you have a high employment cost due to a high percentage of non-chargeable time.

About the calculator

The calculator provides benefits to inexperienced business owners and to those who already run successful businesses. It:

• Assists you to calculate the break-even rates that ensure your costs are covered
• Offers different ways to spread costs to keep charge-out rates competitive and maximise profits
• Allows you to experiment with ‘what if’ scenarios and see the effects on charge-out rates and profits.

A big advantage of this calculator is its flexibility, which reflects the diverse business structures that our members work in. From the details you enter for each chargeable staff member, it calculates the chargeable time they contribute and how much they cost. If you also enter your overhead costs, the maths will be done for you, to work out break-even rates, charge-out rates and profit estimates.

You can enter rough cost estimates to get a quick idea of what your charge-out rates should be, or you can spend more time recording your real costs to get a more accurate picture of how these affect your profits. The more accurate the data entered, the more useful the calculator will be. Once you have saved your costs, the hard work is done. You can play with the variables and explore different scenarios.

There are four videos that can be accessed from the calculator screens. These explain employment costs and overheads, and show how the calculator spreads these costs. There are also two sample scenarios that you can play with, to see how making a change can affect charge-out rates and profits.