How to build an agency rate card in India

There is no reliable published benchmark for what Indian agencies charge, and you should be suspicious of any article that gives you one. Rates vary by city, category, client size and how badly the agency needed the work that quarter, and almost every number circulating online is either a guess or a single agency's quote presented as a market. What you can do, and what actually protects your margin, is build your rate card from your own cost of delivery: the fully loaded monthly cost of the person doing the work, divided by the hours they are genuinely billable, multiplied up to your target margin, and then adjusted for the roughly 20 percent of your rate that GST timing, TDS and slow payment quietly take back before the money is usable.

This guide gives you the arithmetic, in Indian terms, with Indian employment costs and the Indian cash-flow reality attached. The worked numbers are illustrative. Use your own.

Why "what do other agencies charge" is the wrong question

It is the first question every agency owner asks and it leads almost everywhere except to a profitable rate.

The agency quoting ₹15,000 for a reel might have three interns and no office. The one quoting ₹80,000 might have a director, a DOP and a post house. Both numbers are real and neither tells you anything about whether you can deliver a reel at that price and still pay your team in March. Benchmarking without your own cost base is how agencies talk themselves into a rate that loses money at volume.

There is a second problem specific to India. The published rate and the collected rate are further apart here than in most markets, because of the combination of TDS at source, GST paid on invoice rather than on receipt, and payment behaviour that routinely runs past 60 days. An agency comparing its ₹2,500 hourly rate to a foreign benchmark is comparing two different things.

Step one: the fully loaded cost of a person

Start with what someone actually costs you per month, not their CTC and not their take-home.

Two notes on the statutory lines, checked in September 2026. Employer PF is 12 percent of basic wages, but the mandatory contribution is capped at 12 percent of the ₹15,000 wage ceiling, which is ₹1,800 a month, unless you have opted to contribute on full basic. Add roughly another 1 percent for EDLI and administrative charges. Gratuity is provisioned at about 4.81 percent of basic even though it is only paid out after five years of continuous service. If your agency is covered by ESI for lower-paid staff, add that too. Confirm your own numbers with whoever runs your payroll rather than copying these.

The overhead share is the line agencies get wrong most often, usually by leaving it out entirely. Take your total monthly non-delivery cost, which means rent, utilities, admin and finance salaries, the founders' time that is not billable, tools, and professional fees, and divide it across the people who actually deliver work. If that number embarrasses you, that is useful information and not a reason to exclude it.

Step two: the hours they are genuinely billable

This is where most rate cards break, because people divide by 2,000 hours a year and then wonder where the margin went.

Work it out from your own calendar rather than from a rule of thumb:

• Start from 52 weeks at 5 days, which is 260 working days.
• Subtract your public holidays. Indian agencies typically observe somewhere between 10 and 14, depending on the state and the client base.
• Subtract earned leave, casual leave and sick leave as you actually grant it, not as the policy says.
• Subtract internal time: reviews, pitches, training, team meetings, admin. This is the big one and it is rarely below 20 percent.

What survives is often 1,200 to 1,400 genuinely billable hours a year rather than 2,000. That is not a sign of a badly run agency; it is what a services business looks like when you count honestly. The danger is not the number, it is pricing as though the number were 2,000.

On the illustrative designer: ₹84,250 a month is ₹10,11,000 a year. At 1,300 billable hours, the true cost is about ₹778 an hour. At 2,000 hours it would look like ₹506. Price off the second number and you are running a 35 percent margin hole before the first revision request arrives.

Step three: add the margin, and know which margin you mean

Gross margin is revenue minus the cost of delivering the work. Work backwards from the target rather than adding a markup, because a 55 percent margin is not a 55 percent markup and confusing the two is a common and expensive error.

Billable rate = fully loaded hourly cost divided by (1 minus target margin).

At ₹778 an hour and a 55 percent target: ₹778 / 0.45, which is about ₹1,730 an hour. At a 60 percent target it is about ₹1,945.

That is your floor, not your price. What you charge can be higher where the work is valuable, the deadline is tight, or you are the only people who can do it. It should very rarely be lower, and if it is, you should know by exactly how much and why.

Step four: the Indian adjustment nobody makes

Here is the part that separates a rate card that works in a spreadsheet from one that works in a bank account.

Your ₹1,730 an hour does not arrive as ₹1,730. On a ₹1,00,000 invoice:

• TDS takes 2 to 10 percent at source, depending on whether the client deducts under section 194C or 194J. You get it back against your tax liability, but not this quarter.
• GST of 18 percent leaves your account by the 20th of the following month, whether or not the client has paid, because the liability is triggered by the invoice date.
• The cash itself arrives at 45, 60 or 90 days.

None of that changes your margin. All of it changes your capacity to operate, which is what actually constrains a growing agency. The practical consequence is that an Indian agency needs a materially higher margin than the same agency in a faster-paying market just to fund the same growth, because a larger share of its revenue is permanently tied up in the gap between delivery and collection.

Two adjustments worth making to your rate card because of this:

1. Price payment terms explicitly. If a client wants 90-day terms, that is a financing cost and it belongs in the rate. Offering a small discount for advance or 15-day payment is more honest, and usually more effective, than quietly loading everyone.
2. Do not discount to win a slow payer. A client at 90 days and a 10 percent discount is dramatically worse than a client at 30 days and full rate, and the difference does not appear anywhere in a revenue report.

The mechanics of all three deductions are covered in detail in the guide to GST and TDS for Indian agencies.

Per hour, per deliverable, or per month?

Most Indian agencies quote per deliverable, and clients prefer it. That is fine, but the deliverable price still has to be derived from the hourly cost, or you are guessing.

Build it the same way every time: estimate the hours by role, multiply by each role's rate, add a contingency you actually believe in. Then, critically, check the estimate against what similar work has really taken you. Most agencies have this data and cannot reach it, because it sits in timesheets nobody reconciles against the original estimate. An agency that closes that loop prices better every quarter; one that does not repeats the same optimistic estimate for years. That feedback loop is the reason Ancor drafts estimates from your own finished projects rather than from a template.

Whatever the unit, keep the rate card as a real document, attached to contracts and referenced in retainer overage clauses. A rate card that exists only in the founder's head cannot be enforced when the fifth revision round arrives. The guide to retainer structures in India covers how to use it.

Frequently asked questions

What do Indian agencies charge per hour?

There is no reliable published benchmark, and any single figure should be treated with suspicion. Rates vary enormously by city, category, agency size and client, and most numbers circulating online are one agency's quote presented as a market rate. The useful answer is to derive your own floor: fully loaded monthly cost of the person, divided by their genuinely billable hours, divided by one minus your target margin. For many Indian agencies that floor lands well above the rate they are currently charging.

How many billable hours a year should I assume per person?

Closer to 1,300 than 2,000. Start from 260 working days, subtract 10 to 14 public holidays, subtract leave as you actually grant it, then subtract internal time for reviews, pitches, training and admin, which is rarely under 20 percent. Dividing annual cost by 2,000 hours is the single most common reason an agency rate card does not cover its own delivery cost.

What does an employee actually cost an Indian agency beyond salary?

Employer PF, capped at 12 percent of the 15,000 wage ceiling, which is 1,800 a month unless you contribute on full basic, plus roughly another 1 percent for EDLI and administrative charges. Gratuity provisioned at about 4.81 percent of basic. ESI where applicable. Then software, hardware and a share of rent, admin, finance and non-billable leadership time. The overhead share is the line most often left out, and leaving it out is what makes a rate look profitable when it is not.

What gross margin should an Indian agency target?

The same 50 to 60 percent range that applies to services businesses generally, but with a caveat specific to India: because TDS is deducted at source, GST is payable on the invoice date rather than on receipt, and collection routinely runs past 60 days, a larger share of revenue is tied up between delivery and collection than in faster-paying markets. An Indian agency needs a higher margin than a comparable one elsewhere to fund the same rate of growth.

Should I charge more for a client who pays in 90 days?

Yes. Long payment terms are a financing cost and belong in the rate rather than being absorbed silently. A cleaner version is to publish one rate and offer a modest discount for advance or 15-day payment, which rewards the clients you want rather than penalising everyone. What you should not do is discount to win a slow payer: a client at 90 days and a 10 percent discount is much worse than one at 30 days and full rate, and that difference never shows up in a revenue report.