Job Profit Margin Calculator

Margin vs. markup: the difference that costs money

Margin and markup both describe profit, but they measure it against different things. Margin is profit divided by the price the client pays. Markup is profit divided by your cost. On the default example, costs of $325 and a price of $450 give a profit of $125: that's a 27.8% margin but a 38.5% markup.

The trap: if you want a 25% margin and you simply add 25% to your costs, you'll only get a 20% margin. To hit a margin, divide cost by (1 - margin), which is what the "price for target margin" line does.

Include your own pay in labor

If you work on the job yourself, count your own time at a fair hourly wage in labor cost. Otherwise a job can look profitable while really paying you less than you'd pay an employee.

Give every job a share of overhead

Insurance, phone, software, advertising and vehicle payments don't belong to one job, but every job has to help pay for them. A simple method: add up a month of overhead and divide by the number of jobs you do in a typical month.

Use it before you quote and after the job

Before quoting, enter your estimated costs and target margin to get a price. After the job, enter what it really cost to see if the job made the margin you planned. Over a few weeks, patterns show up: certain job types, clients or areas that consistently run under target.

From one job to the whole month

Job margins tell you whether individual quotes are healthy. To see whether the business is healthy, you also need monthly totals: income, expenses by category, net profit and margin over time. A profit tracker spreadsheet does that from a few minutes of logging each week.

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