Assignment Profitability
Is this assignment actually profitable once every direct cost is counted?
Why this comes up
A bill rate that clears margin on paper can still underperform once real assignment conditions apply. Paid hours that exceed billable hours, a program fee, or a financing cost all eat into contribution after the rate was already set. This engine checks the actual result, not just the rate that was supposed to produce it.
How we calculated this
Billings = Bill Rate x Billable Hours Direct Worker Cost = Loaded Cost per Hour x Paid Hours Program Fees = Billings x Program Fee Rate Economic Contribution = Billings - Direct Worker Cost - Program Fees - Funding Cost - Direct Service Cost Contribution Margin = Economic Contribution / Billings
Worked example, using the calculator's own defaults: $43.38/hr bill rate, 40 billable hours, $29.50/hr loaded cost, 40 paid hours, 2% program fee.
Billings = 43.38 x 40 = $1,735.20 Direct Worker Cost = 29.50 x 40 = $1,180.00 Program Fees = 1,735.20 x 0.02 = $34.70 Economic Contribution = 1,735.20 - 1,180.00 - 34.70 = $520.50 Contribution Margin = 520.50 / 1,735.20 = 30.0%
What this means
- Direct worker cost is computed against paid hours, not billable hours; if paid hours exceed billable hours, that unbilled paid time drags real margin below what the bill rate alone implies.
- Program fees are computed as a percentage of billings, so a higher bill rate doesn't just add margin, it also adds fee dollars if the account carries a VMS/MSP program.
- A negative economic contribution at these inputs means the assignment is losing money outright, not just underperforming a target; that's worth flagging immediately, not waiting to discover at reconciliation.
Common mistakes
- Using billable hours for both the billings and the cost calculation, when paid hours (which can differ due to orientation, downtime, or client-side delays) are what actually drive worker cost.
- Leaving funding cost or direct service cost at zero by default when the account genuinely carries one, overstating real profitability.
- Checking the bill rate once at quote time and never re-running actual profitability once the assignment is underway and real hours are known.
Frequently asked questions
Why would paid hours ever exceed billable hours?
Orientation time, training, a client-side delay before work starts, or downtime the client won't pay for but you still owe the worker for are all common causes. Any of these silently compresses margin below the quoted rate.
What should I put for funding cost?
If you factor this account's invoices or draw on a credit line to cover payroll before the client pays, enter the actual per-assignment share of that cost; see Factoring Cost to compute it precisely.
How is this different from Staffing Bill Rate?
Staffing Bill Rate solves forward for the rate you should charge. This engine checks backward: given a rate and real assignment conditions, what did it actually produce.
Limitations
Reflects the specific inputs entered for this one assignment; it does not aggregate across a client's full account or account for seasonal variation in hours.
Next decision
Learn more
How Staffing Bill Rates Work — the full pricing chain this assignment's economics sit inside.