Job profit calculator

To find out what a job made, subtract everything it cost from what you billed. That is the profit. Divide the profit by what you billed and you have the margin. Divide it by what the job cost and you have the markup. The calculator below works out all three from five numbers, and the formulas are here in plain text too.

How to calculate profit margin and markup on a job

Job cost: (hours × cost of one hour) + materials + anything else the job cost
Profit: what you billed − job cost
Margin: profit ÷ what you billed × 100
Markup: profit ÷ job cost × 100

The sums are the same for a cabinet shop, a design studio, a landscaping crew or an independent surveyor: every job comes down to what you billed and what it took to do.

Work out the profit on a job

It runs in your browser: what you type is not sent anywhere, saved, or added to the page address.

What you billed, in dollars

The total price of the job.

Hours worked

All the hours, yours included. For example 7.5.

Cost of one hour of labor, in dollars

What an hour costs you, not what you charge for it.

Materials, in dollars

Everything you bought for the job.

Anything else the job cost, in dollars

A sub, a fee, a rental, travel.

Result

Enter what you billed and what the job cost to see its profit, margin and markup.

What to enter in each box

What you billed: The total price of the job: the invoice, or the quote you are about to invoice. A deposit does not change it, so enter the whole price. If your invoice includes tax that you collect and pass on, enter the amount before that tax, and ask your bookkeeper how your business should treat it.
Hours worked: Every hour the job took, including travel.
Cost of one hour of labor: What an hour of that work costs you, not what you charge for it. For an employee the hourly wage is only part of it, because payroll taxes, insurance and benefits come on top. Your bookkeeper can give you the number to use.
Materials: Everything you bought for this job, delivery included.
Anything else the job cost: A subcontractor’s invoice, a rental, permits and fees, disposal, mileage and travel.

This page is general information, not accounting, tax or legal advice.

Margin and markup are not the same number

Margin says how much of what you billed was left after the costs of the job. Markup says how far above its cost you priced the job. Both start from the same profit, but the margin divides it by the price and the markup divides it by the cost. A job that cost $1,000 and was billed at $1,400 has a markup of 40 percent and a margin of 28.6 percent, because the same $400 of profit is divided by $1,000 in one case and by $1,400 in the other. That is why a 40 percent markup is not a 40 percent margin. When a job makes a profit the markup is always the bigger number, so check which of the two a figure is before you compare it with anyone else’s, or with your own from last year.

A worked example

Say you bill $5,000 for a job. It takes 40 hours, and an hour of that labor costs you $50. You buy $450 of materials, and a subcontractor invoices you $600. These figures are invented for the example.

The example, line by line
Line	Amount
What you billed	$5,000.00
Labor: 40 hours at $50.00 an hour	$2,000.00
Materials	$450.00
Subcontractor	$600.00
Job cost: labor, materials and subcontractor added up	$3,050.00
Profit: $5,000.00 minus $3,050.00	$1,950.00
Margin: $1,950.00 divided by $5,000.00	39.0%
Markup: $1,950.00 divided by $3,050.00	63.9%

Type the same five figures into the calculator above and it shows the same result.

Three mistakes that quietly cost money

Leaving out your own time

If you do part of the work yourself, those hours still cost something, even though no payroll runs for them. Put a price on them, such as what you would pay someone else to do the same work, and count them like any other hour. Leave them out and a job that barely paid for itself looks comfortable.

Leaving out the callback or the rework

Going back to fix a problem is part of what the job cost, even though nobody invoices it. If those hours and materials never reach the job, the job looks better than it was, and the next quote is built on the same mistake. Add them to the hours and the costs when they happen, and run the numbers again.

Quoting from markup when you meant margin

A price set by adding a percentage to cost earns a smaller margin than that percentage. If the margin is the number you want to keep, divide the cost by one minus that margin instead of multiplying it by one plus the markup. For a 40 percent margin on a $1,000 cost, that is $1,000 divided by 0.6, which is $1,666.67, not the $1,400 that a 40 percent markup gives. The gap is $266.67 on one job, and it repeats on every job priced the same way.

Once the job is billed

Profit on paper is not money in the bank until the customer pays. If an invoice runs late, these payment reminder email templates cover what to send and when, and Resources has more free guides and templates.

How Bevr works out the margin on a job

If you would rather not work this out by hand, Bevr can. Log the hours and the materials and Bevr tells you the margin on the job: what you billed, minus what it really cost. It is not your invoice against your quote, which only tells you whether you priced the job right. Materials and subs count against the job.

Read about job costing in the features, or see what Bevr costs.

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