Contractor & construction
Contractor Profit Calculator
Works contractor profit, where job-level measurement finds the pattern.
Result
Overhead is charged as a percentage of the contract price. Jobs that tie up your crew for longer than their price suggests actually absorb more overhead than this method shows.
Get a Free Business AuditHow the calculation works
Revenue less direct costs less overhead, giving profit and margin. Measured at job level rather than only annually it becomes the feedback loop that improves estimating, because the variance between estimated and actual cost is systematic rather than random.
What moves the number
- Actual job costs against estimate.
- Labour hours, the usual source of variance.
- Change orders and whether they were charged.
- Overhead recovery across the jobs completed.
Where this one goes wrong
Work performed outside the original scope and never charged is the single largest quiet loss in contracting, because it happens in small increments that nobody documents and together they consume the margin. Write change orders for everything. Comparing actual against estimated cost by job type then shows which types have been underpriced consistently, which is more valuable than any individual job's result.
Before you quote
- Compare actual against estimated cost on every job.
- Write change orders for work outside the original scope.
- Review variance by job type to find the pattern.
Questions
About this calculator
Where does contractor profit leak?
Work outside the original scope that was never charged. It happens in small increments nobody documents, and together they consume the margin. Writing change orders for everything is the discipline that stops it.
Why measure profit per job?
Because the estimating error is systematic rather than random. Comparing actual against estimated cost by job type shows which types have been underpriced consistently, which is worth more than any individual job's result.
What causes most cost variance?
Labour hours, generally. Material quantities are reasonably predictable while hours depend on access, conditions and what gets discovered, which is why hours against estimate is the figure worth tracking most closely.
Put this calculator on your site
Free to embed. Paste this where you want it to appear. It stays up to date automatically because it loads from BDEVY.
Please keep the attribution line. It is the only thing we ask in return.
How to use this calculator
- Contract price ($). Enter your own figure; the page starts at $13,800.
- Materials ($). Enter your own figure; the page starts at $4,200.
- Labour (burdened) ($). Enter your own figure; the page starts at $3,600.
- Subcontractors ($). Enter your own figure; the page starts at $1,800.
- Permits, equipment, disposal ($). Enter your own figure; the page starts at $650.
- Overhead as a share of revenue (%). Enter your own figure; the page starts at 18%.
The result updates as you type, so you can try a figure, see what it does to net profit, and change it back. Nothing you enter is sent anywhere or saved.
A worked example
These are the figures the calculator opens with. Every number in the results column below is produced by the same calculation the page runs, so you can follow it through before putting your own figures in.
What goes in
| Input | Value |
|---|---|
| Contract price | $13,800 |
| Materials | $4,200 |
| Labour (burdened) | $3,600 |
| Subcontractors | $1,800 |
| Permits, equipment, disposal | $650 |
| Overhead as a share of revenue | 18% |
What comes out
| Result | Value |
|---|---|
| Net profit main result | $1,066 |
| Net margin | 7.72% |
| Gross profit | $3,550 |
| Overhead absorbed | $2,484 |
Gross profit is $3,550 (25.72%). After $2,484 of overhead you keep $1,066, a 7.72% net margin.
How sensitive the answer is
Holding everything else steady and changing only contract price, this is what happens to net profit. It is worth knowing which of your inputs the answer actually hinges on, and which barely move it.
| Contract price ($) | Net profit |
|---|---|
| $6,900 | -$4,592 |
| $10,350 | -$1,763 |
| $13,800 example above | $1,066 |
| $20,700 | $6,724 |
| $27,600 | $12,382 |
Every other input is held at the example value while this one changes, which is not how a real job behaves. Treat it as a guide to which number matters most, not as five separate quotes.
What each figure means
- Contract price ($)
- A money amount, starting at $13,800.
- Materials ($)
- A money amount, starting at $4,200.
- Labour (burdened) ($)
- A money amount, starting at $3,600.
- Subcontractors ($)
- A money amount, starting at $1,800.
- Permits, equipment, disposal ($)
- A money amount, starting at $650.
- Overhead as a share of revenue (%)
- A percentage, between 0 and 90, starting at 18%.
What the results tell you
| Result | What it is |
|---|---|
| Net profit | The headline result. A money figure. |
| Net margin | A percentage. |
| Gross profit | A money figure. |
| Overhead absorbed | A money figure. |
Overhead is where these go wrong
Pricing and margin figures are only as good as the cost you put in. If your cost covers parts and wages but not the van, the insurance, the phone and the unbilled hours, the markup is paying for those before it becomes profit, and the margin you think you are making is not the one you are making.
Keep going
Related calculators
All contractor & construction calculators
Contractor Markup Calculator
Works contractor markup, where overhead recovery has to be inside it.
Open calculatorContractor Overhead Calculator
Totals contractor overhead, where the owner's unbilled time belongs in it.
Open calculatorContractor Break-Even Calculator
Works the jobs or revenue needed to cover a contractor's fixed base.
Open calculatorEstimating is the easy part
The jobs you never hear about cost more than the ones you mis-measure. BDEVY builds the marketing, systems and automation that bring them in.