How the job profit calculation works
Add every cost required to complete the work, allocate overhead, then subtract that total from the customer price. Margin measures profit as a percentage of revenue—not as a percentage of cost.
Formula
- Labor cost = labor hours × true hourly labor cost
- Direct cost = materials + subcontractors + labor + other job costs
- Total job cost = direct cost + (direct cost × overhead rate)
- Profit = customer price − total job cost
- Profit margin = profit ÷ customer price
Example total cost$5,640.32
Price$8,500
Profit / margin$2,859.68 / 33.6%
Planning estimate only: sales tax, income tax, financing cost, retainage, callbacks, and contract risk are not added unless you include them in your inputs.
Job profit questions
What belongs in overhead?
Use a consistent allocation for costs that keep the business running but are not tied to one job, such as office expense, software, vehicles, and administrative time.
Is profit the same as cash flow?
No. A profitable job can still create a cash shortage if deposits, progress payments, retainage, or vendor payment dates do not line up.
Should sales tax be included?
Rules vary. The calculator treats customer price as pre-tax revenue. Confirm taxable items and tax handling for your location.