Glossary · Commercials
What is Bill rate
Also called: charge rate, client rate.
Definition
The hourly rate an agency charges its client for a contractor. It has to cover the pay rate, employment burden, funding cost and the agency's margin.
Applies to: US and UK · Reviewed by James Doyle
In practice
Build a bill rate from the bottom up, never from a competitor's quote. Take the pay rate, add employer burden, then divide the fully burdened cost by one minus your target margin. A $30.00 pay rate at 12.5% burden costs $33.75; at a 25% target margin the bill rate is $45.00.
Rates are local. The same nursing or software role can differ 30% between metros, which is why LAUNCH. publishes a Bill Rate Index built on 2025 wage data rather than asking founders to guess.
Worked example
Burdened cost $33.75 ÷ (1 − 0.25) = $45.00 bill rate.
Related terms
Pay rate
The hourly rate paid to the contractor before employer taxes and insurance. It is the input to every bill rate calculation, not the cost of employing them.
ReadGross margin
The share of the bill rate left after paying the contractor and their employment burden. It is the money the agency actually runs on.
ReadEmployment burden
Every employer cost on top of the pay rate: payroll taxes, workers' compensation, holiday accrual and benefits. Typically 12% to 16% in the US.
ReadMarkup
The percentage added to a contractor's pay rate to reach the bill rate. Clients negotiate in markup; funders and investors think in margin.
Read
Put the theory to work.
Model your rates, costs and funding with the calculators built on our own 2025 data.