Measure what scoped project work actually earns after direct costs, a tax reserve, and unpaid overrun time. The headline result is effective net earnings per total hour, supported by net cash, reserve amount, and cost share—useful for comparing the original price with the effort the engagement really consumed.
Effective net hourly earnings spreads cash remaining after costs and reserve across every hour consumed, including entered unpaid overrun.
This planning result is not accounting profit or taxable income. Treatment of expenses and taxes depends on your records and jurisdiction.
A $6,000 fee with $500 of direct costs leaves a $5,500 reserve base. At 25%, the tax reserve is $1,375 and net earnings are $4,125. Across 55 total hours, effective net earnings are $75 per hour.
They consumed capacity even though the client fee did not increase, so they lower the effective hourly result.
It is shown separately as earmarked cash and subtracted for the planning definition of net earnings used here.
Include costs caused by this engagement, such as paid assets, subcontractors, or project-specific software.
Yes, but direct costs must also be zero; the effective result will then be zero.
Only if you enter an allocated amount as direct costs. Shared overhead is not added automatically.
| Variable | Meaning | Unit |
|---|---|---|
| Gross fee | Client revenue for the work | USD |
| Direct costs | Engagement-specific costs | USD |
| Tax reserve | Planning share after direct costs | % |
| Total hours | Worked plus unpaid overrun | hours |