Minimum Viable Bill Rate
What is the absolute floor I should never price below?
A rate at or above break-even covers cost, but do not call it profitable until it clears $35.54/hr, your actual floor.
Why this comes up
Negotiations and competitive pressure push rates down, and it's easy to keep conceding without a clear line for where "still acceptable" ends and "actively losing money" begins. This engine draws that line in two places: the rate that merely covers cost, and the rate that covers cost plus the smallest margin you're willing to accept.
How we calculated this
Break-Even Bill Rate = Direct Cost / (1 - Variable Fee Rate) Minimum Rate at Margin = Direct Cost / (1 - Variable Fee Rate - Minimum Acceptable Margin)
Worked example: $29.50/hr direct cost, 2% program fee, 15% minimum acceptable margin.
Break-Even Bill Rate = 29.50 / (1 - 0.02) = $30.10/hr Minimum Rate at Margin = 29.50 / (1 - 0.02 - 0.15) = $35.54/hr
The $5.44/hr gap between the two is the floor's worth of margin you'd be giving up by accepting break-even instead of your actual minimum.
What this means
- Break-even covers cost and the program fee, but leaves zero margin for profit, overhead beyond direct cost, or risk. Treat it as a hard floor, not a target.
- The minimum rate at margin is the number to hold in a negotiation; conceding below it means the deal is actively working against you, not just less profitable than hoped.
- A rate at or above break-even can still be a bad deal if it never clears your minimum acceptable margin, "not losing money" and "worth doing" are different bars.
Common mistakes
- Treating break-even as an acceptable price floor in negotiation, rather than the point of last resort it actually is.
- Forgetting the program fee when computing either floor, which understates both numbers.
- Setting "minimum acceptable margin" to zero out of pressure to win a deal, effectively collapsing the minimum rate down to break-even.
Frequently asked questions
Is break-even ever an acceptable rate to actually charge?
Only in specific strategic cases, buying a foothold with a new client you expect to grow, for example, and even then, know you're doing it deliberately rather than discovering it after the fact.
How is this different from Staffing Bill Rate?
Staffing Bill Rate solves for the rate that hits your target margin. This engine solves for the floor below your target, the two numbers you should almost always know together: what you want, and what you absolutely cannot go below.
What if my minimum acceptable margin changes by client type?
Run this separately per client type or segment; there's no single "right" minimum margin across a diversified book, a high-risk or high-touch account often warrants a higher floor than a stable, low-maintenance one.
Limitations
"Minimum viable" reflects the economics you entered, not client-market realities or contractual rate floors.
Next decision
Learn more
What Goes Into Staffing Labor Burden? — where your direct cost figure actually comes from, component by component.