Methodology
How the calculation works
Labor estimate = estimated hours × billable hourly rate
Contingency labor = labor estimate × contingency % ÷ 100
Recommended quote = labor estimate + contingency labor + direct expenses
What each input means
- Estimated billable hours (hours)
- Include planning, communication, development and testing time.
- Billable hourly rate (USD / hour)
- The rate you propose charging your client, not your internal labor cost.
- Contingency (%)
- A buffer applied to labor only. Enter 15 for 15%, not 0.15.
- Direct project expenses (USD)
- Out-of-pocket costs for this project; enter 0 when none apply.
A worked example
A five-page brochure site needs 40 hours at USD 60/hour. Labor is USD 2,400; a 15% buffer adds USD 360. Add USD 120 of direct expenses for a quote of USD 2,880.00.
How to use the result
Treat the result as a starting point for a scoped proposal. A buffer covers uncertainty in the work you have estimated; it does not buy the client unlimited changes. Specify deliverables, included revision rounds and what ends the project.
Assumptions & edge cases
- Contingency applies only to labor, not expenses.
- Payment fees and tax are excluded. Factor them into your final proposal separately.
- A zero-hour estimate returns expenses only. No formula can establish the best market price.
All monetary values are in USD. No currency conversion is performed. Inputs must be non-negative, finite numbers of at most 1,000,000,000; intermediate values are not rounded, and displayed amounts use two decimal places. Very small nonzero values below 0.000001 are not supported.