How is client margin worked out?
What client margin and delivery margin count, how hours are costed, why one-off projects are left out, and who can see the amounts.
3 min readUpdated 7 October 2026
Client margin tells you whether a client's fees pay for the time and costs you put into it. It is worked out from the client's contracts, the hours your team logs in Teamwork, and each person's cost rate.
Before you start
- You need to be agency staff. Money figures are for agency finance roles: by default the owner, directors and the CFO. Account managers see status and hours only.
- Connect Teamwork under Settings, Integrations, and link each person to their Teamwork user. See See tracked time from Teamwork.
- Each person needs a cost: from Xero payroll, or pay set by hand. See See pay and staff costs.
- Teamwork projects must be assigned to the client's contract (Business, Contracts, Teamwork projects).
What counts
| Part | What it includes |
|---|---|
| Retainer and commission | Retainer and commission invoices on the client's contracts for the service month |
| Labour | Hours logged in Teamwork to the contract's projects, within the contract's dates, at each person's calculated rate |
| Direct costs | Costs entered on the contract, such as contractor fees and tools, within its dates |
| Client margin | Retainer and commission, less labour and direct costs, as a share of retainer and commission |
Left out on purpose:
- One-off projects. Their fees, time and costs are measured on their own under Business, One-off projects.
- Time outside a contract's dates. It never lands on that contract.
- Overhead, unassigned and untracked time. Those belong to delivery margin.
Step by step: one client
- Open the client. Under Account, choose Agency margin.
- Pick the month in the command bar.
- Read the tiles: Retainer and commission, Labour, Direct costs, Client margin, Retainer, Commission, Hours on the contract and Target fee.
- Below, Client margin by month, Hours by month, Where the money goes, Where the time goes and Engagements show the detail.
Account managers see Hours, Budget (the retainer at the agency's target hourly rate, in hours), Hours against budget and Margin status, plus Status by month.
A portfolio has the same page under the portfolio's Account, Agency margin.
Step by step: every client
- In the main menu choose Clients, then the Margin tab.
- Choose the month. Only the clients whose contracts served that month are listed.
Delivery margin
Under Business, the Delivery margin tab shows the agency as a whole: delivery revenue (retainers plus the commission you generate, never one-off projects) against the whole delivery team's pay. It reads lower than the sum of client margins because it carries every hour, including overhead and untracked time.
Troubleshooting
- "No contract this month": the client had no contract serving that month.
- "Awaiting time": fees are in but no hours are costed yet.
- "Not available yet" or "Could not be read" on Retainer or Commission: the split could not be loaded. Refresh the page.
- "This brand is billed with its portfolio": the contract is the portfolio's, so open the portfolio's Agency margin.
- Labour looks too low: check every person is linked to Teamwork and has a cost.