The billable rate is what one hour of a person's work sells for. Together with hours it is the whole revenue formula of a services business — revenue = billable hours × billable rate — which makes rate-setting one of the two levers (the other is utilization) that decide whether the month is profitable.
Where a rate comes from:
- Cost-plus — start from the person's cost rate and add the target margin: a $25/h cost at a 50% target margin prices the hour at $50.
- Market — what comparable teams charge for the role and seniority in your region; the ceiling and floor that cost-plus must respect.
- Value — priced against the client's outcome rather than your cost; rare below enterprise-size deals.
Structure is a separate choice: one rate per project (simplest to invoice), per role (seniors bill X, mids Y), or per person. Whichever model, the discipline is the same — rates agreed in writing, applied consistently, and reviewed at renewal. The classic leak is rate erosion: a rate set two years ago quietly surviving two salary rounds, so margin shrinks with nobody having decided it.
A rate is only real if invoices actually use it — a rate card in a spreadsheet plus hand-typed invoices is how drift happens.
In Helia, each project carries a default hourly rate and any assignment can override it per person; the invoice generator prices every line from the effective rate — assignment override first, project rate otherwise — so the rate agreed is the rate billed.