A blended rate is a single hourly rate that combines the different rates of the people working on a project into one weighted average. Instead of quoting a senior rate, a junior rate and everything in between, you quote one number that reflects the actual mix of who does the work. It is widely used in agencies and consultancies for proposals.
The formula
Blended rate = total billable value of all team members / total hours of all team members
Because it is weighted by hours, the person who logs the most time has the biggest pull on the result. Change the staffing mix and the blended rate moves with it.
A worked example
A project uses two people:
| Role | Rate | Hours | Value |
|---|---|---|---|
| Senior | 200 | 20 | 4,000 |
| Junior | 100 | 30 | 3,000 |
| Total | 50 | 7,000 |
The blended rate is 7,000 divided by 50, which is 140 per hour. Note that it is not the simple midpoint of 150, because the junior worked more hours and pulled the figure down.
When a blended rate helps
- Proposals: one clean number is easier to present than a role-by-role price list.
- Forecasting: you can estimate a job's cost from total hours alone.
- Comparisons: clients can compare your blended rate against alternatives.
The risk is that a blended rate hides the staffing mix. If more senior time creeps in than you assumed, the real cost rises above the blended figure you quoted, which quietly eats margin.
Related terms
A blended rate is closely tied to your billable hours and the rate cascade that prices them. To build one from your own team's rates, use the agency rate calculator, or check what each person earns per hour with the effective hourly rate calculator.
