Contractor Profit Margin Calculator
Enter your job revenue and costs to see your true profit margin and markup percentage.
Profit Margin Questions Answered
What is a good profit margin for contractors?
Most successful contractors aim for 15-25% net profit margin after all expenses. Some specialty trades like electrical and plumbing can achieve 25-35%. If your margin is below 10%, you're likely undercharging or not accounting for all overhead costs.
How do I calculate profit margin on a job?
Profit margin = (Revenue - Total Costs) / Revenue × 100. Total costs include materials, labor, subcontractors, permits, equipment, and your portion of overhead (insurance, vehicle, office). Many contractors forget to include overhead, which makes their margin look higher than it really is.
What's the difference between gross and net profit margin?
Gross profit margin only subtracts direct job costs (materials + labor). Net profit margin also subtracts overhead (insurance, truck, office, admin time). Net margin is the true measure of your business profitability.
Why is my profit margin so low?
Common reasons: not charging for all labor hours (including drive time, cleanup), forgetting overhead costs in your pricing, giving too many discounts, material waste not accounted for, or scope creep on jobs. Use a true hourly rate calculator that includes all overhead.