The cost rate is the internal mirror of the billable rate: cost rate = monthly cost of the person ÷ working hours per month (≈173 for a 40-hour week). An engineer costing $4,330 a month runs at about $25/hour; billing them at $50 leaves a 50% gross margin on every billed hour.
Two decisions define whether the number is honest:
- What counts as cost. Gross salary alone understates it — employer taxes, benefits, equipment and license shares belong in a fully-loaded figure. Many small firms start from gross salary and add a flat overhead multiplier later; either works if applied consistently.
- Which hours divide it. Cost per available hour is stable; cost per billed hour moves with utilization — a person billing half their time effectively costs twice as much per billed hour. That is why low utilization so often masquerades as "our rates feel too low".
Cost rates are sensitive data: they encode salaries. Margin reporting should aggregate them, not print them next to names in a spreadsheet that gets forwarded.
In Helia, per-person monthly cost is resolved from the latest compensation record — annualized salary converted to the company currency and divided by 12 — with the tenant's blended average as the fallback for anyone without one; project margins then pro-rate that cost by each person's hours on the project against a 40-hour week, and only admin-gated totals are shown, never individual salaries.