Internal hourly rates are key to understanding your agency’s profitability. In Allfred, they are used for calculating the cost of tracked time and comparing it with billable income from projects.
📊 Why it matters:
Allfred compares the revenue from billable work (based on client rates) with the internal cost of time tracked by each user (based on their internal hourly rate). This allows agencies to monitor project profitability and make smarter, data-driven decisions.
🧮 How to Calculate the Internal Hourly Rate
You can calculate the internal hourly rate of each user using the following formula (already included in the downloadable Excel template):
Formula:
= (Average Gross Monthly Salary of an Employee + (Total Monthly Operating Costs of the Agency × (Monthly Capacity of the Employee / Total Monthly Capacity of All Employees))) ÷ Monthly Capacity of the Employee
📥 What You’ll Need to Fill In
Category | Description |
Average Gross Monthly Salary of an Employee | For employees: gross salary + employer-paid contributions (e.g., health, social insurance). |
Total Monthly Operating Costs of the Agency | Total agency costs excluding employee salaries (e.g., rent, software, licenses, electricity). |
Total Monthly Capacity of All Employees | Total number of productive hours from all employees in a month (e.g., 5 employees × 160h = 800h). |
Monthly Capacity of the Specific Employee | Productive hours available for the employee (e.g., 160h for full-time, 80h for part-time). |
⚠️ Note: Do not include salaries or freelancer invoices in Total Monthly Operating Costs. Those should be entered separately as part of Average Gross Monthly Salary. This ensures you don’t double-count labor costs.
📝 Where to Set the Internal Hourly Rate in Allfred
Go to Users section
Clik on users name → Internal hourly rate
Enter the value
Save
📈 How to Measure User Profitability in Allfred
If you want to understand the financial contribution of each team member, Allfred makes it easy with a downloadable User Profitability Report available from the Utilization Report.
🔍 Where to Find It:
Go to Reports → Utilization
Select the desired date range and users
Click the Export button to download the report
The report provides profitability per user based on the selected data source and includes:
💰 How Profitability Is Calculated:
If "Tracked & Allocated Hours" is selected as the data source:
Profitability = Generated Billable Revenue – Internal Costs
Generated Billable Revenue = (Tracked + Allocated hours in the selected date range) × client hourly rate of the position under which the user tracked or was planned
Internal Costs = (User’s daily capacity × number of working days) × internal hourly rate
If "Task Budgeted Hours" is selected:
Profitability = Generated Billable Revenue – Internal Costs
Generated Billable Revenue = (Task budgeted hours in the selected date range) × client hourly rate of the position under which the user tracked or was planned
Internal Costs = (User’s daily capacity × number of working days) × internal hourly rate
Allfred takes into account:
Custom daily capacities (learn how to set daily capacity)
Changes in internal hourly rate during the date range
This report is ideal for agency leadership or CFOs looking to evaluate profitability on a per-user basis and optimize staffing or pricing strategies.