How to know what an hour of your team really costs
The problem
You bill the client at a certain hourly rate. But that number isn't what you keep.
In between sits what an hour of your team actually costs you: salary, contributions, and the share of everything else it takes to make that hour productive.
And the margin isn't fixed. As the hours eat into the job's budget, it thins out — a little at a time, quietly.
Rate isn't margin
An hour has two prices. The one you charge (the client rate) and the one you spend (the full hourly cost). The margin lives in the gap.
Full cost isn't the hourly wage. It's the wage plus contributions, severance, and the share of costs every hour carries with it. It's almost always higher than it looks.
And here's the point: a job's budget is a number of hours. Every hour you log eats into it. While you're inside the quote the margin holds; when the hours overrun, the margin falls — even if the rate hasn't moved a cent.
The math is simple: margin = (rate × budgeted hours) − (full cost × hours used) − direct costs.
Try it here
This is a sample job. Quote of 300 hours at €60 an hour: a €18,000 budget. Full cost of one hour: €42. There are already 260 hours logged and €3,000 in direct costs — so the margin starts at 22.7% (€4,080).
Log hours with the +1 / +2 / +8 chips and watch the margin move. The +8 is a full day.
Sample data
Log one day (+8): hours used climb to 268 out of 300 and the margin drops from 22.7% to 20.8%. Another eight hours and you're below 19%.
The rate didn't change. What changed is how many hours you're burning on the same budget. And this is the number you usually only see at the end of the job, when there's nothing left to do about it.
Do it on your own data
On the example it's obvious. On yours, with your real rate and hourly cost, that's where you decide whether a job still stands up.
Want to see hours turn into margin in real time? Discover LoomX Tracker — everyone logs their own hours from their phone, you watch the margin update — or let's talk: 30 minutes, no sales follow-up.
Read also: What does an employee really cost (the complete formula) and Contribution margin: what it is and why it's more useful than gross margin.
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