Tools & technology
Hourly Rate Calculator
An hourly rate calculator derives a chargeable rate for intercompany services by dividing a defined cost base, such as salary, overhead and mark-up, by available or recorded working hours for relevant staff. The resulting rate is applied to time recorded against intercompany projects or support activities, producing consistent.
The calculation typically starts with a cost pool for a function or role category, including salary, benefits and an allocated share of overhead, then divides this by standard or actual available hours to derive a base rate. A transfer pricing mark-up is then applied where the policy requires a profit element on services.
Once the rate is set, it is multiplied by hours recorded in a timesheet or project system against specific intercompany engagements, generating the charge to be invoiced to the recipient entity. Recalculating rates periodically, such as annually, using updated cost and hours data helps ensure charges continue to reflect current.
In practice
What matters when applying hourly rate calculator
- Combines cost base with recorded or standard hours
- Applies transfer pricing mark-up where required
- Produces a consistent fully loaded hourly rate
- Multiplies rate by recorded time for charges
- Supports periodic recalculation for accuracy
Frequently asked
Common questions
What costs are typically included in the hourly rate base?+
The cost base usually includes salary and employer costs for relevant staff plus an allocated share of overhead such as office space, equipment and support functions, before any transfer pricing mark-up required by the group's service fee policy is added to.
How often should hourly rates be recalculated?+
Most groups recalculate rates annually, using updated salary, overhead and available hours data, to ensure charges reflect current cost structures. More frequent review may be appropriate where costs or staffing levels change materially during the year.
See how the tooling handles this in practice
Our transfer pricing tools calculate intercompany charges, benchmark financing and reconcile the intercompany ledger from your own data. Book a short walkthrough and we will show the workflow on a scenario that matches your group structure, rather than a generic demo dataset.