Calculators
Agency Profit Calculator
Calculate agency gross income, delivery margin and operating profit after salaries, freelancers and overheads.
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The tool
Enter your numbers below. Results update as you type, and nothing leaves your browser.
Everything you enter stays on your own machine. Nothing is sent to us or to anyone else, which you can confirm in your browser network tab.
What people use it for
- Monthly agency profitability reviews
- Testing the effect of a new hire on margin
- Pricing retainers to reach a target margin
- Preparing an agency for sale
About this tool
What the Agency Profit Calculator does
Agencies should measure profit against agency gross income (AGI): revenue minus pass-through costs such as media spend. This calculator separates delivery costs from overheads, so you can see whether the problem is pricing, utilisation or fixed costs.
Formula
- AGI = revenue − pass-through costs
- Delivery margin = (AGI − delivery salaries − freelancers) ÷ AGI
- Operating margin = (AGI − delivery − freelancers − overheads) ÷ AGI
Worked example
Using the starting values in the calculator above:
| Input | Value |
|---|---|
| Monthly revenue billed | $80,000 |
| Pass-through costs (media, printing) | $15,000 |
| Delivery team salaries | $35,000 |
| Freelancers and contractors | $5,000 |
| Overheads (rent, tools, admin, sales) | $12,000 |
| Result | Value |
|---|---|
| Operating margin on AGI | 20.0% |
| Monthly operating profit | $13,000 |
| Agency gross income | $65,000 |
| Delivery margin | 38.5% |
| Annual operating profit | $156,000 |
How to read the result
Margins quoted on total revenue look artificially low for agencies that buy media for clients. Using AGI makes your numbers comparable with other agencies.
A weak delivery margin points to pricing or utilisation; a healthy delivery margin with a weak operating margin points to overheads.
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Questions
Questions about this tool
The things clients actually want to know — costs, timelines, ownership and what happens after launch.
Revenue minus pass-through costs such as media spend or printing billed on to clients. It is the money the agency actually earns from its own work.
Many agency consultants cite around 20% operating profit on AGI as a strong target, though results vary by size and model.
Raise prices or reduce scope creep to lift delivery margin, keep billable utilisation healthy, and control overhead growth as the agency scales.
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