Free Business Tool
Contractor Job Profit Calculator
Calculate gross profit, net margin, and revenue per labor hour for any job — before you sign the contract. Know exactly whether this job is worth taking and what your overhead is actually costing you.
See How We Help Contractors ScaleIs This Job Actually Profitable?
Enter the job revenue and all costs below. Gross profit, net margin, and a profitability signal update instantly.
Total amount billed to the customer for this job.
All installed materials at fully loaded cost including delivery and tax.
Total crew hours on this job.
Include wages + payroll burden + workers' comp.
Dumpsters, lifts, special tools, or equipment rental charged to this job.
Any work contracted out to other companies for this job.
Typical range: 20–30% for specialty contractors. Divide annual overhead by annual revenue to find yours.
Healthy
Net margin: 38.0% · Net profit: $5,700
Gross profit
$8,700
58.0% gross margin
Overhead allocation
$3,000
20% of $15,000
Net profit
$5,700
38.0% net margin
Revenue / labor hr
$375
per field hour
Total direct cost
$6,300
Direct labor cost
$1,800
Material %
30.0%
Total cost incl. OH
$9,300
Ballpark estimate only
These figures are rough estimates based on the inputs provided. Actual profit depends on accurate job costing, fully loaded labor rates, and correctly calculated overhead. Use this as a planning tool, not a substitute for formal job cost accounting.
📋 Important: All calculator results are ballpark estimates
These figures are approximate estimates. Actual profitability depends on accurate job costing, fully loaded labor rates (not just wages), and a correctly calculated overhead rate derived from your actual financials. Always confirm results with your accountant or bookkeeper.
How to Use This Calculator
Enter the contract price
Use the full amount you will invoice the customer — including all change orders, material allowances, and permit fees if you collect them. If the job is time-and-materials, use your estimated final invoice amount.
Enter fully loaded material cost
Include all installed materials at your actual cost: lumber, roofing, HVAC equipment, solar panels, wire, pipe, fasteners, and consumables. Add delivery charges and sales tax. Do not use your supplier's list price — use what you actually pay.
Enter labor hours and fully loaded rate
Use total crew hours, not just the lead technician. The rate should be fully loaded: hourly wage + employer FICA (7.65%) + workers' compensation + health insurance + other burden. If you're not sure, use our Labor Burden Calculator to find your loaded rate. Using bare wages instead of loaded rates is the most common reason contractors underestimate job costs.
Enter equipment, rental, and sub costs
Include any equipment rented for this specific job (lift, dumpster, concrete saw), plus the full cost of any subcontractors or specialty trades. If you use a roofing sub to do flashing work, include their invoice here.
Set your overhead rate
Calculate your overhead rate once, then apply it to every job. Add up your annual overhead costs: rent, admin salaries, insurance, vehicles, software, marketing, owner compensation beyond field work. Divide by your annual revenue target. That percentage is your overhead rate. Most specialty contractors run 20–30%.
Why Contractors Lose Money on Jobs That Look Profitable
Pricing labor at wages, not loaded cost
A $28/hr roofer may cost $40–$45/hr fully loaded with FICA, workers' comp, health, and retirement. Pricing jobs at the wage rate instead of the loaded rate means every job is systematically underpriced by 30–50%. The most common source of profit leakage on the labor line.
Underestimating overhead
Many contractors treat overhead as a surprise at year end rather than a planned cost per job. If your overhead is $200,000/year on $800,000 revenue, every job carries a 25% overhead cost. Forgetting to include this means 25 cents of every revenue dollar never shows up as profit.
Change orders not collected
Out-of-scope work done without a signed change order is free work. A job estimated at 20% gross margin that runs 10% over in labor without a corresponding change order ends up at 10% gross margin — or below. Every hour of uncaptured change order work transfers money from your pocket to the customer's.
Material waste and overruns
Jobs with higher complexity than estimated often use more material. A complex hip roof estimated at 10% waste that actually runs 20% waste adds real cost. Tracking actual vs. estimated material quantities on completed jobs helps you calibrate future estimates.
Subcontractor cost overruns
If your sub overbills or the sub scope expands, your margin shrinks. Subs should have written agreements with a fixed price or a clear time-and-materials cap before work starts. Surprises at sub billing time are almost always your cost, not the customer's.
Low revenue per labor hour
Revenue per labor hour is a powerful summary metric. A job with $200/hr in revenue per field hour is significantly more efficient than one at $80/hr. Track this across job types to identify your highest-value work categories and steer sales toward them.
Want to Know Your Margin Before You Leave the Customer's Home?
Guessing at profitability during a customer appointment is how contractors make promises they can't keep — or leave money on the table. SubcontractorHub's EasyQuote builds a complete sales proposal at the customer's home, with your cost structure already loaded in.
Reps see their margin in real time as they build the proposal — and can offer financing through GoodLeap and Service Finance to close the deal the same day. Contractors using SubcontractorHub report 20–35% higher close rates and better margin visibility across their pipeline.
See How It WorksBuild proposals with your cost structure pre-loaded
See gross margin on every proposal as you build it
Present financing options that increase close rates
Customer approves and signs before you leave
Jobs flow to production — no manual re-entry
Common Questions About Contractor Job Profit
What is a good profit margin for a contractor?
Industry benchmarks vary by trade. For specialty contractors (HVAC, roofing, solar, electrical, plumbing), healthy net profit margins after overhead typically run 8–15%. Gross profit margins (before overhead) generally run 30–50%. Remodeling and general contracting tends to run lower (5–10% net) because of higher material costs and subcontractor coordination. If your net margin is below 8% after overhead, investigate whether your pricing, overhead allocation, or project selection needs attention.
What is the difference between gross profit and net profit for a contractor?
Gross profit is what's left after subtracting direct job costs (materials, direct labor, equipment, subcontractors) from revenue. Net profit is what remains after also deducting overhead costs — the fixed or semi-fixed costs of running the business that are not tied to any single job (office rent, admin salaries, insurance, vehicles, software, marketing). Gross margin tells you how profitable your field operations are. Net margin tells you how profitable the entire business is.
How do I calculate contractor overhead allocation per job?
The most common method is to express overhead as a percentage of revenue. Add up all your annual overhead costs (rent, insurance, admin, marketing, vehicles, tools, software, owner salary) and divide by projected annual revenue. If your overhead is $200,000 and your revenue target is $1,000,000, your overhead rate is 20%. Apply that rate to each job's revenue to allocate its share of overhead. Then: net profit = gross profit − (revenue × overhead rate).
What costs should be included in a contractor job estimate?
A complete job estimate should include: (1) Materials — all installed materials at fully loaded cost including delivery. (2) Direct labor — crew hours × fully loaded hourly rate (wages + burden, not just wages). (3) Equipment and rental — boom lifts, dumpsters, special tools. (4) Subcontractor costs — any work outsourced to subs. (5) Overhead allocation — your overhead rate × the job's revenue contribution. (6) Target profit — typically 10–20% of revenue depending on job complexity. Missing any of these categories is how contractors underbid and lose money.
Why do contractors use gross margin instead of gross profit dollars?
Gross margin (as a percentage) allows you to compare jobs of different sizes on equal footing. A $50,000 job with $10,000 gross profit and a $10,000 job with $2,500 gross profit both look very different in dollars. But the first has a 20% gross margin and the second has a 25% gross margin — the smaller job is actually more efficient. Tracking gross margin by job type helps you identify your most profitable work categories and steer sales toward them.
What is a typical overhead rate for a specialty contractor?
Overhead rates vary widely by company size and how the owner accounts for their own compensation. Small specialty contractors (3–10 crew members) typically run overhead at 20–30% of revenue. Larger companies with more infrastructure may run 15–25% if they've achieved scale efficiencies. Early-stage contractors with high fixed costs and low volume may run 35–50%+ in overhead. Know your number precisely — pricing at 20% overhead when your actual overhead is 35% means you're losing money on every job.
Ready to Stop Guessing at Margins?
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Book a Free DemoAll calculations are estimates based on historical information and should be verified by the user.