Hourly and Day Rate Calculator for Recruitment Consultants
Architecture Social Contractor Rate Calculator
Convert permanent salaries to contractor rates and maximize recruitment margins
Client Charge Rate
What this is: The rate you charge the client for the contractor's services.
Calculation: Umbrella Rate ÷ (1 - Margin%)
Example: £250 umbrella with 20% margin = £312.50 charge rate
Key point: This is your invoice rate to the client and determines your total revenue.
Margin vs Markup - Architecture Recruitment
Margin: The percentage of the selling price that is profit. If you charge £250 with a 20% margin, your profit is £50.
Markup: The percentage added to your cost. A 25% markup on £200 gives you £250 (£200 + £50).
Architecture Social Standard: We aim for 18-25% margins on contractor placements. This ensures competitive rates while maintaining sustainable business operations.
Salary Conversion Tip: A good rule of thumb is Annual Salary ÷ 200 = Day Rate (assuming 5 days/week, 40 weeks worked)
Umbrella Rate
What this is: The rate paid to the umbrella company, which then pays the contractor.
Includes: PAYE rate + 12.07% holiday pay + 13.8% employer's NI = Total 25.87% on top of PAYE
Why it matters: This is your actual cost for the contractor and the basis for margin calculations.
Payment flow: You → Umbrella Company → Contractor (as PAYE employee)
Annual Contractor Income
Calculation: PAYE Rate × Days per Week × 52 weeks
What's included: Base rate + holiday pay (built into umbrella rate)
What's NOT included: Pension, sick pay, or other permanent benefits
Key advantage: Typically 20-40% higher gross than equivalent permanent salary due to no employer costs.
Contractor vs Permanent Income
Why contractors earn more:
• No employer pension contributions (3-5% saving)
• No employer NI when comparing gross rates
• Flexibility premium - contractors paid for uncertainty
• Can work more days (no forced company holidays)
Trade-offs: No sick pay, no paid holidays beyond 12.07%, no job security, need to manage own pension.
Monthly Margin
Calculation: (Client Rate - Umbrella Rate) × Days/Week × 4.33 weeks
Why monthly? Best timeframe for tracking consultant performance and forecasting.
Target: £3-5k per placement per month is excellent in architecture recruitment.
Tip: 3 contractors at 20% margin = ~£10k monthly recurring revenue.
Annual Margin Value
Calculation: Weekly Margin × 46.4 working weeks (excluding holidays)
Revenue recognition: This assumes contractor works full year minus standard holidays.
Business value: Each contractor placement adds this to annual recurring revenue.
Portfolio building: 10 contractors = 10× this amount in annual revenue.
