Agency Margin Calculator
Healthy agencies hit 50%+ gross margin and 20%+ net. Where does your agency land?
Calculate your agency gross and net margin from revenue, staff costs, and overhead. Healthy agencies hit 50%+ gross and 20%+ net.
Frequently Asked Questions
What goes into staff costs — salaries or fully-loaded cost?
Use fully-loaded cost: gross salary plus employer taxes, social insurance contributions, and any mandatory benefits. In most EU countries that adds 20 to 30 percent on top of gross salary. Using gross salary alone understates the real cost of headcount by a significant margin.
What counts as overhead?
Overhead covers the fixed costs that do not scale directly with a specific project: rent, software subscriptions, insurance, equipment depreciation, professional services (accountant, lawyer), and internal non-billable salaries like operations staff. Exclude client-specific expenses — those are direct costs.
What is a healthy gross vs net margin for a 5-person agency?
A five-person agency running well typically lands between 45 and 55 percent gross margin and 15 to 25 percent net. Below 40 percent gross usually means either underpricing or a high staff-to-revenue ratio. Net margin below 10 percent leaves too little buffer for slow months.
How do utilization and margin connect?
Staff costs are mostly fixed. When utilization rises — meaning more of those paid hours become billable and invoiced — gross margin expands without adding headcount. A 10-percentage-point improvement in utilization on a five-person team often translates directly into a several-thousand-euro monthly margin gain.
Does Teetrack help track this in real time?
Yes. Teetrack logs tracked hours against projects and clients, so you can see whether billable hours are on track to hit your utilization target before month-end. Combine that with your fixed cost numbers and your margin picture becomes current rather than a month-old guess.