AI project billing calculator

• Agree how AI usage is charged with the client before the work starts. This is a planning estimate, not an invoice and not proof that a client owes the amount.
• The API cost is whatever you type in. Nothing is fetched from a provider or checked against one, so take it from the provider's own usage records and keep that evidence.
• Tax, discounts and payment processing fees are not included. The total is before tax.

1. Labor = hours × hourly rate, rounded to the cent.
2. Billable provider cost = reported API cost, minus the included allowance in allowance mode, never below $0.00.
3. Markup = billable provider cost × agreed markup, rounded to the cent. Zero for pass-through.
4. Client usage price = billable provider cost + markup.
5. Total before tax = labor + client usage price, the exact sum of the lines shown.

Each line is rounded once, half up: half a cent or more rounds up. The arithmetic runs on whole cents rather than decimal fractions, so the lines always add up to the total. Inputs accept up to two decimal places. A field that is empty, negative, malformed or out of range shows an error and the estimate stays hidden until it is fixed; no value is quietly adjusted.

Pass-through at cost

The client pays exactly the reported cost. Labor is added separately.

Cost plus agreed markup

The client pays the reported cost plus the agreed percentage of it.

Included allowance, markup on overage

Use this only when the labor or project price you enter already covers a set amount of provider cost. The calculator subtracts the allowance from the reported cost and applies the overage markup only to what is left. It does not add the allowance, a retainer or any other fee on top of labor, so the covered cost is never charged twice. If the allowance is larger than the cost, billable cost is $0.00 and the rest of the allowance is not billed or credited.

Billr does not track allowances for you. If your agreement has one, counting usage against it is your job.

Markup is a share of your cost; margin is a share of the price the client pays. A 20% markup on $100.00 of provider cost gives a usage price of $120.00. The $20.00 you add is 16.67% of that price, not 20%. To keep 20% of what the client pays, you need a 25% markup: $125.00. This calculator takes a markup. The markup and margin table in the guide converts between them.

A fictional developer spends 6.5 hours on a search project at $120 an hour, and the provider's usage records show $58.09 of API cost for the client's work. These are the calculator's starting values, and the same figures as the guide's worked example. Here is what each agreement produces.

In the cost-plus row, 20% of $58.09 is $11.618, which rounds up to $11.62. With a $40.00 allowance, only $18.09 is billable and the 20% applies only to that. With $100.00, the allowance covers all of the cost, so the client pays labor only, and $41.91 of the allowance is left unused.