Blended Rate Calculator
Calculate the weighted average hourly rate for your agency or team. Essential for ensuring your fixed-fee projects are profitable across all seniority levels.
Rate Distribution
Team Economics
Blended Rate: $109.41 / hr
Project Value
Total Project Budget: $9,300 for 85 hours.
Leverage
Check your mix. If the Senior Partner has more hours than the Junior, your blended rate will be very high (and hard to sell).
Efficiency
Use the Junior staff to lower the blended rate, making your bid more competitive.
Execution Steps
Add roles to your team composition (e.g. Senior, Junior).
Set the 'Billable Rate' and 'Hours Allocated' for each role.
The tool calculates the 'Blended Rate' (Weighted Average).
Use this single rate to simplify client proposals.
Pro Strategy
- If your actual mix skews more senior than planned, your margin erodes. Monitor this weekly.
- Clients prefer blended rates for simplicity, but procurement teams might ask for a breakdown. Be prepared.
- Aim for a pyramid structure: Few senior hours (Strategy/QA) and many junior hours (Execution).
Core Concepts
Blended Rate
A single hourly rate quoted to the client that covers a mix of junior and senior talent. Simplifies billing but requires careful internal management.
Labor Arbitrage
The profit strategy of billing a blended rate but utilizing mostly lower-cost junior talent for execution.
Resource Mix
The ratio of high-cost vs low-cost hours. Shifting this mix is the primary lever for agency profitability.
What is Blended Rate Calculator?
This calculator uses a weighted average formula based on hours allocated. It visualizes the contribution of each role to the total project value, highlighting outliers where expensive resources might be over-utilized.
Best For
- • Creating a Master Services Agreement (MSA).
- • Estimating a new project.
- • Auditing profitability of past projects.
Limitations
- • Assumes all hours are billable/productive.
- • Doesn't account for efficiency differences (a Senior might do it 2x faster).
Alternative Methods
Rate Card
Listing specific prices per role.
Retainer Calc
Monthly flat fee.
Industry Applications
See how this methodology generates real revenue uplift in different sectors.
Consulting Firm
Lost bids due to high partner rates.
Switched to blended rate of $250/hr (mixing $500 Partners and $150 Associates).