Client fee calculator for accountants: what a monthly fee pays you for each hour worked

A fixed monthly fee hides the hourly rate. The client pays £250 on the first of the month, the work gets done, and nobody adds up whether the practice earned £60 an hour on that client or £30. The calculator adds it up.

Free tool

Client fee calculator for accountants: the monthly fee this client needs, and the hourly rate the present fee pays

Bookkeeping hours a month VAT returns a year Hours for each VAT return Year-end accounts and tax return, hours Payslips a month Minutes for each payslip Emails, calls and chasing, hours a month Rate you need to recover (£ an hour) Software you pay for this client (£ a month) Fee the client pays now (£ a month, before VAT)

Works in your browser. Nothing you type leaves this device.

What goes into the hours

Five kinds of work, each entered the way you would naturally count it.

The rate you enter is the rate the practice needs to recover for an hour of work, not anyone's salary. It has to carry the wages, the rent, the software, the insurance, the time nobody can bill and the profit. If you do not have a figure, take the practice's yearly costs plus the profit you want and divide by the hours you can realistically charge to clients.

The answer for the example client

At £55 an hour, 81 hours is £4,455. Add £216 a year for the bookkeeping and payroll software the practice pays for on this client's behalf and the fee needed is £4,671 a year, or £389.25 a month before VAT.

The client pays £250 a month, £3,000 a year. Take off the £216 of software and £2,784 is left to pay for 81 hours: £34.37 an hour. The fee is £1,671 a year short. To make £250 a month work at £55 an hour, the client would have to take 50.6 hours a year, not 81.

Neither number says the client is a bad one. They say the fee was set for a smaller job than the one being done.

Where the hours go that nobody quoted for

When a fee is first quoted, the bookkeeping, the VAT returns and the year end are priced. The twelve hours of emails, calls and chasing usually are not, and they are the hours that grow. A client who sends records in a carrier bag in the last week of the quarter costs more than the same client who uploads them monthly, and a fixed fee charges both the same.

Two things reduce those hours without a difficult conversation. The first is asking for records in the same way on the same day every period: our guide on stopping clients sending records late has the schedule, and the records request letter maker writes the letter. The second is measuring. Keep a tally for a month of every email and call per client; the five clients at the top of that list are where the fee and the work have drifted furthest apart.

Using the figure

• At the yearly fee conversation. "The work has grown from four VAT returns and a year end to monthly bookkeeping and payroll for three" is a factual statement. The calculator turns it into a number you can show.
• Before you quote a new client. Enter your best estimate of the hours, then add the emails line honestly. Quote the monthly figure the calculator gives, not the figure the last practice charged.
• When Making Tax Digital for Income Tax adds quarterly updates. A sole trader or landlord who used to be one tax return a year becomes four updates and a final declaration. Put the extra hours in and see what the fee needs to be before the first quarter, not after it.
• When deciding what to hand over. If chasing and routine emails are 12 of 81 hours, getting them drafted for you is worth up to 12 hours at your rate, £660 a year on this client. Our admin scorecard for accountancy practices does that sum across the whole office.

What the calculator does not know

It does not know what the client would pay elsewhere, how likely they are to leave, or what they are worth in referrals. Those are judgements for the person who owns the relationship. It also treats every hour as costing the same; if a junior does the bookkeeping and a partner does the year end, run it twice with two rates and add the results.

Fees here are before VAT. Nothing on this page is tax advice, and the fee you charge is your decision.

Overlyft can set up an AI assistant that drafts record requests and chasers for a person to approve. On the example client that is the 12-hour line, not the other 69.