Charge Out Rate Calculator UK
Maximise your profitability with our exclusive Charge Out Rate Calculator!
How do I calculate my basic UK charge-out rate?
Take your annual employment cost (salary + National Insurance + pension), add overhead costs, divide by billable hours (typically 1,440), then multiply by 2.5-3.5.
For example, a £40,000 salary plus £12,000 in costs, divided by 1,440 hours and multiplied by 3, would suggest a charge out rate of about £108 per hour before VAT.
Should my UK charge-out rate include VAT?
You must always state if your charge-out rate includes VAT. Most professional services add 20% VAT. So, if your base rate is £100 per hour, you must clearly state that you will be charging £100 + VAT or £120 including VAT. This helps avoid confusion, especially since VAT-registered clients can reclaim it.
How should I adjust my rates for different regions in the UK?
London rates typically run 20% to 40% higher than regional ones. For instance, if the regional rate for your service is £100 per hour, the London equivalent would be £120 to £140 per hour.
Major cities like Manchester or Birmingham usually command 10% to 20% above regional rates, so about £110 to £120 per hour in this example.
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