An engineering firm charges an hourly rate that covers the cost of an employee over the hours you can actually bill, plus a profit margin. Utilisation is the share of paid hours that you charge to clients. The lower it is, the more expensive each billable hour becomes.
CBS (Statistics Netherlands) publishes the costs and sales of all engineering firms together. Those figures are an average of large and small firms, not a standard. They do help you to compare your own figures.
In short
- In 2024 engineering firms spent an average of 37.8% of net sales on staff and 30.9% on purchases, such as subcontracted work. Operating profit was 16.0% (CBS, average).
- The cost of a billable hour is the cost per employee divided by the billable hours. In the worked example it falls from € 116 at 60% utilisation to € 87 at 80%.
- DNR2025 recognises three forms of fee: a percentage of the construction costs, time spent or a fixed amount. Without an agreement, indexation follows the CBS index of collectively agreed wages.
In this article
- How does an engineering firm work out its hourly rate?
- What do the CBS figures say about the costs of an engineering firm?
- What does an employee of an engineering firm cost per year and per hour?
- What is utilisation and why does it determine your rate?
- How much have prices for technical consultancy risen?
- Hourly rate, percentage or fixed price: which do you choose?
- How do you keep track of your rate and utilisation?
How does an engineering firm work out its hourly rate?
You divide the cost of an employee by the hours you can bill, and add your profit. The cost is the salary with social security contributions and pension, plus a share of the costs of the office, the software, the cars and the insurance. Billable hours are the hours you record on an assignment and charge to the client.
- Add up all the costs for the year, excluding what you pass on directly, such as a hired draughtsperson or a soil test.
- Divide those costs by the number of FTEs, so you know the cost per employee.
- Estimate the number of paid hours per employee and the share of them that is billable.
- Divide the cost per employee by the billable hours. That is the cost price per hour. Your rate is above it.
The same structure applies to any trade where you sell hours. A worked example for an installation trade is in the article on the hourly rate of an electrician. The difference at an engineering firm is that a larger part of the time goes to proposals, meetings and internal projects, and that the work is often paid in phases.
What do the CBS figures say about the costs of an engineering firm?
Staff is the largest cost item. Engineering firms together spent 37.8% of their net sales on staff in 2024, 30.9% on purchases and 13.7% on other operating costs such as premises, cars and software. Operating profit was 16.0% of net sales. That is our own calculation on the CBS figures (CBS, table 81156ned).
Purchases here means the cost of sales. At an engineering firm this is mainly work that the firm subcontracts or hires in and passes on. A firm that does a lot itself has fewer purchases and relatively higher staff costs.
The profit of 16.0% is not a margin you can expect as a firm with staff. Of the 159,500 people working at engineering firms, 115,300 were employees (CBS, table 81156ned). The pay of the others, such as owners of a sole proprietorship, is not in the staff costs but in the profit.
The table counts all engineering firms together, including the large firms with hundreds of staff. For a firm of 5 or 20 people the picture may be different. So use the figures as a comparison, not as a target.
What does an employee of an engineering firm cost per year and per hour?
On average about € 92,000 per FTE in staff costs in 2024. That is the sum of gross wages, social security contributions, pension and other staff costs at engineering firms, divided by the number of employee FTEs. It is our own calculation on the CBS figures (CBS, table 81156ned).
The gross hourly wage is much lower than what you need to charge per hour. Employees working as engineers (excluding electrical engineering) earned a median gross hourly wage of € 34.40 in 2025. For building and natural science technicians it was € 29.70 (CBS, table 86355NED). That is the hourly wage without holiday pay, other special payments and overtime.
The difference comes from three things. Employer contributions and pension are added to the wage. Each employee also carries a share of the other costs, at engineering firms on average about € 28,000 per FTE (our own calculation on the CBS figures for other operating costs and depreciation). And not every paid hour is billable.
What is utilisation and why does it determine your rate?
Utilisation, also called the billable ratio, is the share of paid hours that you charge to clients. Holidays, sickness, training, proposals, business development and internal meetings are paid hours that nobody pays for. So those costs have to come back in the rate for the billable hours.
A worked example, not an industry figure. An employee costs € 120,000 a year: € 92,000 in staff costs and € 28,000 in other costs, rounded to the CBS averages. They have 1,720 paid working hours, an assumption of 40 hours a week for 43 weeks. At 60% utilisation that is 1,032 billable hours and each billable hour costs € 116. At 70% it is € 100, at 80% € 87.
There is no public, official figure for the utilisation of engineering firms. The CBS tables measure costs and sales, not hours. Your own time records are therefore the best source. Measure utilisation per employee and per month, and look at the whole year, because holidays and proposal peaks make the months uneven.
Include the owner in the calculation too. A director who spends half of their time on business development and management lowers the utilisation of the whole firm. Their hours belong in the calculation, even if they have no salary on a payslip.
How much have prices for technical consultancy risen?
According to CBS, prices for engineering and related technical consultancy in the second quarter of 2026 were 22.9% higher than the 2021 average. Compared with a year earlier the increase was 5.0% (CBS, table 85817NED). That is a price index for the whole market, not advice for your own rate.
In a longer assignment, record how the rate moves. The standard terms DNR2025 say that the fee is indexed periodically in a way the parties agree. If nothing is agreed, the fee follows the CBS index of collectively agreed wages for architecture and engineering firms for October, with an adjustment every year on 1 January (DNR2025, article 12.2).
Hourly rate, percentage or fixed price: which do you choose?
DNR2025 recognises three forms. The fee can be a percentage of the execution costs, in other words the construction costs. It can also be based on time spent, with hourly rates that you agree in writing. Or it is a fixed amount for a described phase, scope and duration of the work (DNR2025, article 12.1).
With a fixed price you carry the risk of extra hours yourself. Your utilisation then says less than your income per hour worked. So always convert a fixed price back into hours: how many hours fit within it at your cost per hour, and what happens if the work takes 20% longer?
Clients often prefer a fixed price. A Dutch study of auctions in which law firms bid for standard cases found that clients strongly preferred bids with a fixed fee over an hourly rate (Felső, Onderstal & Seldeslachts, 2022). The research is about lawyers, not engineers. It does show that a fixed price for a well-described task can be a selling point.
A fixed price only works if the task is well described. Agree per phase what is included and what is not, and what extra work costs. Then you know which part of the hours you can earn back if the assignment grows.
How do you keep track of your rate and utilisation?
With time records that keep billable and non-billable hours separate. Record every hour on a project or on a fixed internal code, such as proposal, training or meeting. Then you can see the utilisation per employee and for the whole firm every month.
- Every quarter, compare your staff costs as a share of sales with the CBS average of 37.8%, and look for the explanation if you are far from it.
- Recalculate your cost per billable hour every year, after the pay round and the new rent.
- Divide the sales of a completed project by the hours recorded. That is your real income per hour, even with a fixed price.
If the real income per hour is below the cost price, a higher rate only helps if the client accepts it. It is often more effective to reduce non-billable time, for example by preparing fewer proposals for requests you are unlikely to win, or by reusing standard work.
Sources
- CBS (Statistics Netherlands), Business sector, labour and financial data by industry, SBI 2008, table 81156ned, industry 7112 Engineering firms, year 2024, accessed 31 October 2026. opendata.cbs.nl
- CBS (Statistics Netherlands), Employees, hourly wage and occupation, table 86355NED, occupations 0712 Engineers (excluding electrical engineering) and 0721 Building and natural science technicians, year 2025, accessed 31 October 2026. opendata.cbs.nl
- CBS (Statistics Netherlands), Service prices, commercial services and transport, index 2021=100, table 85817NED, CPA 7112 Engineering and related technical consultancy, updated 4 September 2026. opendata.cbs.nl
- BNA and Royal NLingenieurs, De Nieuwe Regeling 2025, legal relationship between client and architect/engineer (DNR2025), articles 12.1 and 12.2 (in Dutch). nlingenieurs.nl
- Felső, F., Onderstal, S. & Seldeslachts, J. (2022). The pricing structure of legal services: do lawyers offer what clients want? Review of Industrial Organization, 61(2), 123-148. doi.org