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Cost Per Hour Formula:
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The Visiting Angels Cost Per Hour calculation determines the hourly cost of care services by factoring in the caregiver's salary, total hours worked, and the organization's markup for operational expenses and profit.
The calculator uses the following formula:
Where:
Explanation: The formula calculates the base hourly rate by dividing salary by hours worked, then adds the organization's markup to determine the final cost per hour charged to clients.
Details: Accurate cost per hour calculation is crucial for home care agencies to ensure proper pricing that covers expenses while remaining competitive. It helps maintain financial sustainability while providing quality care services.
Tips: Enter the caregiver's total salary in USD, total hours worked, and the organization's markup per hour. All values must be valid (salary > 0, hours > 0, markup ≥ 0).
Q1: What is included in the Angels Markup?
A: The markup typically covers administrative costs, training, insurance, benefits, and profit margin for the agency.
Q2: How does this differ from caregiver pay rate?
A: The caregiver's actual pay is just the salary divided by hours. The cost per hour includes additional agency expenses.
Q3: What's a typical markup for home care agencies?
A: Markup varies but often ranges from $5 to $15 per hour depending on location and services provided.
Q4: Should overtime hours be calculated differently?
A: Yes, overtime hours typically cost more due to higher wage rates and should be calculated separately.
Q5: How often should this calculation be reviewed?
A: Agencies should review their cost structure quarterly or whenever there are significant changes in wages or expenses.