Accountants Break-Even Rate (Monthly) Calculator Examples
Worked monthly break-even rate examples for accounting practices with different costs, profit targets and billable utilisation levels.
These examples show how monthly overheads, owner pay, target profit and invoiceable time affect the average hourly rate an accounting practice needs to charge. They are illustrative planning calculations using a single currency throughout each example.
Example 1: Sole practitioner with moderate overheads
A small practice has 120 available work hours and expects 65% of them to be billable.
Input Summary
Monthly business overheads
$2,400
Monthly owner pay
$4,500
Monthly target profit
$600
Available work hours
120 hours
Billable utilisation
65%
Calculation Breakdown
- 1Billable hours120 × 0.6578 hours
- 2Required monthly revenue2,400 + 4,500 + 600$7,500
- 3Break-even hourly rate7,500 ÷ 78$96.15 per hour
- 4Cost-only hourly rate(2,400 + 4,500) ÷ 78$88.46 per hour
Result Summary
Cost-only hourly rate
$88.46 per hour
Accountants Break-Even Rate (Monthly) Calculator
The sole practitioner needs an average rate of $96.15 per billable hour to generate $7,500 from 78 billable hours.
Example 2: Growing practice with a higher revenue target
The practice has 160 available hours and expects 75% billable utilisation.
Input Summary
Monthly business overheads
$6,800
Monthly owner pay
$7,000
Monthly target profit
$3,200
Available work hours
160 hours
Billable utilisation
75%
Calculation Breakdown
- 1Billable hours160 × 0.75120 hours
- 2Required monthly revenue6,800 + 7,000 + 3,200$17,000
- 3Break-even hourly rate17,000 ÷ 120$141.67 per hour
- 4Target profit margin3,200 ÷ 17,000 × 10018.8%
Result Summary
Target profit margin
18.8%
Accountants Break-Even Rate (Monthly) Calculator
With 120 billable hours, the practice needs to average $141.67 per billable hour to achieve $17,000 in monthly revenue.
Example 3: Low-utilisation month
The practice has 140 available hours but expects only 50% billable utilisation.
Input Summary
Monthly business overheads
$3,500
Monthly owner pay
$5,000
Monthly target profit
$1,500
Available work hours
140 hours
Billable utilisation
50%
Calculation Breakdown
- 1Billable hours140 × 0.5070 hours
- 2Required monthly revenue3,500 + 5,000 + 1,500$10,000
- 3Break-even hourly rate10,000 ÷ 70$142.86 per hour
- 4Cost-only hourly rate8,500 ÷ 70$121.43 per hour
Result Summary
Cost-only hourly rate
$121.43 per hour
Accountants Break-Even Rate (Monthly) Calculator
At 50% utilisation, the required average rate rises to $142.86 per billable hour.
Example 4: High-utilisation specialist practice
The practice has 180 available hours and expects 85% billable utilisation.
Input Summary
Monthly business overheads
$9,000
Monthly owner pay
$8,000
Monthly target profit
$5,000
Available work hours
180 hours
Billable utilisation
85%
Calculation Breakdown
- 1Billable hours180 × 0.85153 hours
- 2Required monthly revenue9,000 + 8,000 + 5,000$22,000
- 3Break-even hourly rate22,000 ÷ 153$143.79 per hour
- 4Target profit margin5,000 ÷ 22,000 × 10022.7%
Result Summary
Target profit margin
22.7%
Accountants Break-Even Rate (Monthly) Calculator
The specialist practice needs an average billing rate of $143.79 per billable hour to reach its monthly target.
How to Read Your Results
The break-even hourly rate is an average target across all billable work, not necessarily the price of every individual service.
Required monthly revenue is the invoicing target needed to cover the amounts entered.
Estimated billable hours are lower than available work hours because they allow for non-billable activity.
The cost-only hourly rate is useful for showing the effect of the target profit separately.
Compare the result with actual realised fees, expected job hours, discounts and write-offs rather than only published rates.
Assumptions & Important Notes
- Each example uses monthly figures in one currency.
- Billable utilisation is assumed to be achievable for the stated month.
- Overheads, owner pay and profit targets are treated as fixed for the calculation period.
- The examples do not automatically allow for tax, late payment, bad debt or one-off costs.
Related Examples
Frequently Asked Questions
What is a realistic billable utilisation for an accounting practice?
It depends on the practice, service mix and season. Estimate it from expected invoiced hours after allowing for administration, meetings, marketing, leave and unbilled work.
How can I use the examples for fixed-fee work?
Multiply the calculated hourly benchmark by the expected hours for a job, then consider the scope, complexity and delivery risk of that fixed-fee service.
Why is the hourly rate in a low-utilisation example so much higher?
The monthly costs and target are spread across fewer invoiceable hours, increasing the revenue required from each hour.
Do these examples include sales tax or income tax?
No. They use only the figures shown and do not automatically add taxes.
Can a practice use different rates for different services?
Yes. The calculated result is an overall average benchmark. Individual service rates can vary if the combined expected revenue still supports the monthly target.
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