How this calculation works
Both percentage fees and the target profit margin use the invoice as their base. The remaining share must cover internal labor and other delivery costs. If fee plus margin reaches 100%, no finite positive cost-recovery quote exists under this model.
Quote = (hours × internal hourly cost + expenses) / (1−fee share−profit margin)A worked example
11,000 of delivery cost with 10% invoice fees and 20% invoice profit margin requires a quote of about 15,714.29.
Good to know
A transparent arithmetic model using your inputs. Example prices, rates and multiples are demonstrations, not benchmarks or offers. No tax, exchange-rate conversion, live account access or automatic attribution is supplied. Monetary display is rounded; calculations retain additional precision.
An invoice margin is not a cost markup
A 20% margin means profit is 20% of the invoice. Adding 20% to a cost instead creates a markup, whose fraction of the final price is smaller. Percentage invoice fees use that invoice base as well.
The equation leaves the remaining invoice share to cover internal labor and direct expenses. Fee share plus target margin must be below 100% for a positive cost to be recoverable with a finite quote.
Value the labor consistently
Internal hourly cost can represent the labor amount you choose to recover. It is not necessarily the client-facing hourly billing rate. Using a billing rate that already contains profit as an internal cost can layer profit assumptions on top of one another.
A quote based on estimated hours is sensitive to scope changes and overruns. Compare a second scenario with more hours or different direct expenses, rather than assuming the first estimate establishes a commercially acceptable price.
A few questions, answered
Are fee and margin applied sequentially?
No. In this model both are shares of the same invoice, so their shares are subtracted together before dividing cost.
Does it recommend a market margin?
No. You enter the target; the tool shows its arithmetic implications.