Billing rate

A billing rate is the price the client pays for one hour or one day of a staff member's time. The number is set during contract negotiation and usually varies by trade, by seniority and by the terms of the engagement. A senior strategist might bill at one rate on a discovery sprint and at a different rate on a long-term retainer with the same client.

Billing rate is distinct from cost rate, which is what the staff member's time costs the firm. The gap between them, multiplied by hours worked, is the gross margin the project produces. Tracking both numbers per role lets a services firm price work with confidence and spot which engagements are quietly losing money before the quarter closes.

Related: project margin, utilization rate, time and materials.