Glossary
Blended rate
Also called: blended hourly rate · average bill rate
A blended rate is a single hourly rate charged for work performed by several people with different individual rates. It is calculated as the total expected cost of the hours divided by the total hours, and it simplifies quoting and invoicing for teams.
Last updated October 13, 2026
How to calculate it
Estimate the hours each role will contribute and multiply by that role's rate, then divide the total by the total hours. If a lead at $150 contributes 20 hours and two developers at $90 contribute 80 hours, the blended rate is (3,000 + 7,200) ÷ 100 = $102 an hour. The rate is only as good as the mix estimate behind it.
When it helps
Blended rates make proposals simpler to read and invoices simpler to approve — one rate, one line. They also let a team move work between people without renegotiating. Retainers and long engagements with a stable mix are the natural fit.
When it hurts
If the actual mix shifts toward senior people, a blended rate underprices the work; if it shifts toward junior people, the client overpays and may notice. Track hours per person even when billing at a blended rate so you can see the real margin and reset the rate at renewal.
In Hoursmith
Hoursmith prices time at the project's rate, which can serve as a blended rate for a team, while still recording which member logged each hour for internal reporting and, on Agency, team payouts.