Agency Profitability Calculator
Enter six numbers and see your billable utilization, delivery margin, net profit margin, and effective hourly rate, each compared to a 2026 agency benchmark. Everything runs in your browser, nothing is stored, and there is no signup.
How each number is calculated
- Billable utilization =
billable hours / available hours x 100. It shows how much of your paid capacity actually earns. - Delivery (gross) margin =
(net revenue - delivery cost) / net revenue x 100, where delivery cost is your team size times the fully loaded cost per person. - Net profit margin =
(net revenue - delivery cost - overhead) / net revenue x 100. - Effective hourly rate =
net revenue / total billable hours, and the multiple compares it to your cost per billable hour.
These four connect: utilization times your effective rate drives delivery margin, and delivery margin minus overhead is your net margin. For the full picture, with all 12 metrics, formulas, and 2026 benchmarks, read the key metrics every agency should track for growth. To set the rate that feeds these numbers, see how to calculate your billable hourly rate.
Frequently Asked Questions
Yes. It is completely free, there is no signup, and nothing you enter is stored or sent anywhere. All the math runs in your browser, so you can use it as often as you like and compare scenarios privately.
Start from net revenue (billings minus pass-through media and subcontractor costs). Subtract your direct delivery cost (the fully loaded cost of the hours spent delivering) to get delivery margin, then subtract overhead to get net profit margin. This calculator does all three at once and shows each against a 2026 benchmark.
A healthy net profit margin runs about 10 to 20%, with roughly 15% as the long-run norm and the leanest shops reaching 20 to 30%. The average digital agency was around 13% in 2025 (Promethean Research). These figures assume you have already paid yourself a market-rate salary.
Delivery and production staff typically run about 65 to 85% billable utilization. Below 60% you are paying for capacity that is not billing; sustained readings above 85% signal understaffing or burnout. Whole-agency utilization, counting non-delivery roles, is usually lower, around 50 to 60%.
Delivery margin, or gross margin, is the share of the fee left after the direct cost of the people who delivered the work, before overhead. Aim for roughly 55% at the P&L level and 70% per project. It is arguably the most important agency metric, because thin delivery margins quietly erase overall profit.