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Delivery margin calculator.
See what utilisation, bill rate and cost rate do to gross margin. Change any number and the results update instantly. Nothing you enter leaves your browser.
Monthly result
42.9%
Healthy (40%+)Gross margin
- Revenue
- ₹44,80,000
- Delivery cost
- ₹25,60,000
- Gross margin
- ₹19,20,000
Break-even utilisation: 46%. Below that, the team costs more than it bills.
What utilisation does to margin
| Utilisation | Revenue | Margin | Margin % |
|---|---|---|---|
| 60% | ₹33,60,000 | ₹8,00,000 | 23.8% |
| 65% | ₹36,40,000 | ₹10,80,000 | 29.7% |
| 70% | ₹39,20,000 | ₹13,60,000 | 34.7% |
| 75% | ₹42,00,000 | ₹16,40,000 | 39.0% |
| 80% | ₹44,80,000 | ₹19,20,000 | 42.9% |
| 85% | ₹47,60,000 | ₹22,00,000 | 46.2% |
| 90% | ₹50,40,000 | ₹24,80,000 | 49.2% |
Benchmarks shown are my own operating ranges for digital commerce delivery, not an industry survey.
How the calculation works
- How do you calculate gross margin for a delivery team?
- Gross margin % = (revenue − delivery cost) ÷ revenue. Revenue is billable hours × bill rate, where billable hours are available hours × utilisation. Delivery cost is every available hour × the fully loaded cost rate, because you pay people whether or not their time is billed.
- What is break-even utilisation?
- The utilisation at which revenue exactly covers delivery cost: cost rate ÷ bill rate. If your cost rate is half your bill rate, you break even at 50% utilisation, and every point above that is margin.
- What gross margin should a delivery practice target?
- My own operating benchmark for digital commerce delivery is 40-55% gross margin after fully loaded cost. Below about 30%, the practice is usually subsidising clients through unbilled change, rework or bench time.