Hourly Rate & Service Cost Base
Cost-based hourly rates you can defend
Intragroup service charges only work if the underlying hourly rate is right, and getting that wrong undermines every recharge built on top of it. This module builds a fully-loaded, consistent hourly rate per role and per entity, ready for markup and invoicing, so pricing stands up to scrutiny from tax authorities.
What the module gives you
Cost base build-up
Salary, employer taxes, benefits, indirect costs, and overheads all roll up into a fully-loaded cost per FTE, calculated separately for each role and each entity in the group. This gives a realistic starting point for pricing, rather than relying on gross salary figures that understate the true cost of delivering a service.
Productive hours calibration
Only genuinely chargeable hours are counted towards the rate, with holidays, sick leave, internal administration, and training stripped out to give a realistic denominator. This prevents rates from being understated, helps ensure the cost base is fully recovered, and keeps the figures defensible under scrutiny.
Consistent hourly rates
One consistent methodology is applied across every service entity in the group, so intercompany service charges remain defensible and directly comparable between entities and jurisdictions. This removes the arbitrage that arises when different teams calculate rates using their own assumptions and inconsistent local practices.
TP-mark-up ready
The cost-based rate produced by the tool is a clean starting point on which the group's transfer pricing markup is applied, with no double-counting and no hidden margin buried in the numbers. This separation makes it straightforward to demonstrate exactly how the final invoiced rate was constructed, step by step.
Use cases
When to use it
Intercompany service agreements (management, IT, R&D)
Cost-plus service recharges
Time-based intragroup billing
Benchmarking service rates across entities
Get consistent hourly rates
Book a demo to see the hourly rate build-up run on your own payroll and cost data, using your actual roles, entities, and cost structures rather than a generic template. You will see how fully-loaded cost, productive hours, and markup come together into a single defensible rate ready for invoicing to counterparties.
Frequently asked
Hourly rate FAQ
Why compute hourly rates centrally?+
Computing hourly rates centrally means a consistent methodology is applied across every entity, which avoids arbitrage between service providers and gives auditors and tax authorities a single, coherent story to follow. Local teams no longer need to build their own assumptions, which also saves time during each closing cycle.
How are productive hours estimated?+
Productive hours are estimated by starting from statutory working hours and deducting holidays, sick leave, training, and internal administration, based on actual data where available or industry-standard assumptions otherwise. This produces a realistic denominator reflecting genuinely chargeable time rather than gross hours.
How is the markup applied?+
The tool produces the cost base first, entirely independent of any markup decision, so the underlying numbers stay clean and auditable. The group's transfer pricing markup, for example five or seven percent, is then applied on top, consistent with the documented transfer pricing policy and ready for invoicing to counterparties.