Estimate the full annual budget for a contractor workforce from billable hours, hourly rates, agency markup, and fixed onboarding or management costs. See direct labor, markup, and effective cost per contractor without treating contractors as salaried employees.
The main result is a planning budget for billed labor, markup, and entered fixed expenses. It does not assume employee benefits or payroll taxes.
Use the vendor contract to determine whether markup is already included in the hourly bill rate before adding it here.
For 35 contractors billing 30 hours weekly at $85 for 52 weeks, direct labor is $4,641,000. A 12% markup adds $556,920; with $75,000 fixed costs, total annual cost is $5,272,920.
No. Set markup to zero when the hourly rate is fully loaded to avoid double counting.
Yes. Reduce weekly hours to an annual average if contractors have unpaid gaps or seasonal schedules.
Not automatically. Add only contractor-related fixed costs that apply to the arrangement.
Yes. The model then reports only entered fixed costs, which can represent a standby or onboarding scenario.
Total annual contractor cost is divided by the average active contractor headcount.
| Cost component | Basis |
|---|---|
| Direct labor | Headcount × hours × rate × 52 |
| Markup | Percent of direct labor |
| Fixed cost | Annual entered amount |