How to Calculate a Blended Rate for Consulting (With Team Examples)
How to calculate a blended rate for a consulting engagement or staffing team: weight each person's hourly rate by their hours, sum, and divide. Worked agency examples plus a free calculator.
A blended rate for consulting is a single hourly rate that stands in for a whole team of people billing at different rates. Instead of quoting a client a partner at $400/hr, a manager at $250/hr, and two analysts at $120/hr, the firm quotes one number β the weighted average β so the proposal is simple and the effective cost is unchanged. This guide shows exactly how to calculate it, with the team-mix examples agencies actually use.
The consulting blended rate formula
The blended rate is a weighted average of each person's rate, weighted by the hours they bill β not a simple average of the rates:
Blended Rate = Ξ£(Hours Γ Rate) Γ· Ξ£(Hours)
The person who logs the most hours pulls the blended rate toward their rate. That is why a senior-heavy engagement blends higher than a delivery-heavy one, even with the same people on the roster.
How to calculate a blended consulting rate in 3 steps
- Multiply each person's rate by their estimated hours on the engagement.
- Add those amounts together to get total project revenue.
- Divide by the total hours across the whole team.
The result is the one rate that, billed for every hour on the project, produces the exact same total as your mixed-rate team.
Example 1: A four-person delivery team
A consulting firm staffs a project with the following mix:
| Role | Rate | Hours | Amount |
|---|---|---|---|
| Partner | $400 | 20 | $8,000 |
| Manager | $250 | 60 | $15,000 |
| Analyst A | $120 | 100 | $12,000 |
| Analyst B | $120 | 100 | $12,000 |
| Total | 280 | $47,000 |
Blended rate = $47,000 Γ· 280 hours = $167.86/hr.
Notice the blended rate sits close to the analyst rate, because analysts carry 200 of the 280 hours. Shift more hours to the partner and the blended rate climbs fast.
Example 2: Onsite and offshore blended rate
Blended rates are the standard way agencies quote mixed onshore/offshore teams:
| Team | Rate | Hours | Amount |
|---|---|---|---|
| Onshore (US) | $150 | 400 | $60,000 |
| Offshore | $45 | 600 | $27,000 |
| Total | 1,000 | $87,000 |
Blended rate = $87,000 Γ· 1,000 = $87.00/hr. That single number is what appears on the statement of work, even though no individual actually bills $87.
You can run any of these team mixes in the Blended Hourly Rate Calculator β enter each rate and the hours billed at it, and it returns the weighted blended rate instantly.
Blended rate vs. bill rate vs. cost rate
These three terms get mixed up in professional-services pricing, so keep them distinct:
- Cost rate β what the person actually costs you (salary plus benefits and overhead, expressed hourly).
- Bill rate β what you charge the client for that person, after markup or target margin.
- Blended rate β the weighted average of the bill rates across the team, used to simplify the quote.
Blend your cost rates and you learn your internal cost of delivery. Blend your bill rates and you get the client-facing number. Both use the same weighted-average formula; only the inputs change.
When a blended rate helps β and when it hurts
A blended rate is worth quoting when the team mix is stable and predictable, because it makes proposals cleaner and easier to approve. It works against you when the mix is uncertain: if the client ends up needing far more senior time than you assumed, a locked blended rate can erode your margin. In those cases, quote a blended rate for a defined scope and re-blend if the staffing plan changes.
Frequently Asked Questions
How do you calculate a blended rate for consulting?
Multiply each team member's hourly rate by the hours they are expected to bill, add those amounts together, and divide by the total hours. The result is the weighted-average rate for the engagement. For example, a partner at $400/hr for 20 hours plus three staff billing 260 hours at roughly $130/hr blends to about $150/hr.
Is a blended rate the same as the average of everyone's rate?
No. A blended rate weights each rate by hours, so the people doing the most work influence it the most. A simple average of the rates ignores hours and almost always gives the wrong number for a real engagement.
What is a blended rate card?
A blended rate card is a pricing sheet that quotes one weighted-average rate per service or team tier instead of listing every individual's rate. It is built from the same weighted-average formula, using a typical staffing mix for that type of work.
How do agencies use blended rates for offshore teams?
Agencies weight the onshore rate by onshore hours and the offshore rate by offshore hours, then divide by total hours. This produces a single blended rate for a mixed-location team that reflects the actual proportion of work done in each location.
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