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A cost rate is what one hour of a person’s time costs your business.

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A simple example

Sarah Lin’s cost rate is $45 per hour. She tracks 3 hours on “Homepage wireframes”. 3 × $45 = $135 Those 3 hours cost Northwind Studio $135. Her billable rate is 100/hour,sothesame3hoursareworth100/hour, so the same 3 hours are worth 300 to the client. The margin is $300 − $135 = $165.

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A business example

The same week on Bluebird Coffee – Website Redesign: Margin percentage: $1,140 ÷ $2,160 = 52.8%. That single number is the reason cost rates exist. Priya can see the project is still healthy before the budget runs out, not after the invoice is sent.

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What it is

A cost rate is a price per hour, attached to a person, with three parts:

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Why it exists

Revenue on its own tells you nothing about whether a project is worth doing. A retainer that bills $10,000 a month is a good deal or a bad one depending entirely on what the hours cost you. The cost rate is the input that turns revenue into margin.

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What to put in a cost rate

Cost is your figure to define. Common approaches: Northwind Studio uses fully loaded costs for employees and pay-through for contractors – which is why Ana Ferreira’s cost rate (55)sitssoclosetoherbillablerate(55) sits so close to her billable rate (80).

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Cost lives on the person only

There is no project cost override and no client cost override. Someone costs you the same whoever they are working for. On a project’s Team table the Cost column is read-only for exactly this reason. To change what someone costs, change their person rate at Settings → Rates.

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How to set a cost rate

1

Open Settings → Rates

Go to Settings, then Rates under Billing & rates.
2

Open the person

Use the action at the end of their row and choose Manage.
3

Switch to the Cost tab

The tab is labelled Cost (internal). If you do not see it, you do not hold rate.viewCost.
4

Enter the rate

Fill in Rate / hour, Currency and Effective from.
5

Click Add rate

You see “Cost rate saved.”

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Permissions – cost is a firewall

Cost visibility is deliberately narrower than billing visibility. A Project Manager can manage rates and see every billable rate, but never a cost figure. When Priya opens the Rates page:
  • The Cost rate column is not rendered.
  • The Cost (internal) tab is not rendered.
  • The cost rows are not in her rate history.
This is not a hidden column that could leak. The cost figures are removed before the page is built, so there is nothing to inspect.
Sees both columns, both tabs, and the full history. Can set and remove cost rates.
See /rates/rate-permissions and /concepts/roles-and-capabilities.

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Plans – cost rates need Pro

Setting a cost rate requires the profitability feature, which is on the Pro plan. This is the one rate write that is plan-gated.
Dropping to Free never deletes cost data. Cost, revenue and margin already recorded stay readable – you cannot record a new cost rate until you are back on Pro. See /concepts/plans-and-features.
Who may see a cost number is always a capability question (rate.viewCost, time.viewCost), never a plan question.

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Edge cases

Entries record billable value but no cost. Margin cannot be calculated, so profitability figures for that person are missing rather than wrong.
Allowed, and worth knowing about. It means you are losing money on every hour. Nothing blocks it – TimeTracker reports the negative margin rather than refusing the number.
Cost is per person, so pick the figure you want to plan against and set a project billable override for the price difference. Cost cannot vary per project.
No. Entries snapshot the cost rate they were recorded at. Add a new dated cost rate and work from that date forward uses it. See /rates/rate-snapshots.
It is already hidden. rate.viewCost is Owner and Admin only by default.
Allowed. Each rate carries its own currency. Keep it consistent with your workspace base currency unless you have a reason not to. See /rates/currencies-and-exchange-rates.

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Options and settings

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What happens next

  1. New time entries for that person record a cost alongside the billable value.
  2. Project profitability and margin become available – see /budgets/profitability-and-margin.
  3. Cost-bearing reports can be run by people who hold the cost capability.

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Troubleshooting

Billable rates

The other half of the margin.

Profitability and margin

Where cost is actually used.

Rate permissions

The cost firewall in full.

Set a person rate

Step by step.

Rate snapshots

Why raising a salary is safe.

Plans and features

What Pro adds.