4 Steps to Calculate Your Fully Burdened Rate

By Jason Swenk on October 24, 2013

fully burden rateHow many times do you start looking at the total billings of your business, and wonder why your business isn’t as profitable as you think it should be? The gross revenue is significantly higher than last quarter or even year, but you struggle with making payroll. Are you fully calculating the burdened rate of your agency correctly?

I struggled with this for many years, and it almost even took us under. I kept seeing more and more accounts being won, which made us have to go into hiring mode. There was a huge problem that I wasn’t aware of….

Employing employees costs more than just the salaries or hourly rate you pay.

A business incurs additional costs which includes, non-billable hours, taxes, etc. When I was doing the math, I wasn’t calculating the fully burden cost into the project price or even the hiring decision.

The fully burdened cost is the full hourly cost to employ an employee for the hours they actually work, which includes wages and additional costs. By calculating the fully burdened costs, it allows you to make decisions about which projects you can do and how much profitbility you want.

If you would like the steps you can take to find out your fully burdened rate… click below to download the steps and the exact formula you can use.

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