What is job profitability?
Job profitability is how much a single job actually made you once every cost that belongs to it is subtracted from what you charged. It is measured two ways: gross profit, the dollar amount left over, and margin, that profit as a percentage of the quote. Unlike a month-end or year-end total, job profitability answers one question — did this job pay? — which is the number that tells you which work to take more of and which to quote higher or turn down.
How to calculate job profit
The formula is simple: job profit = amount billed − job costs, where job costs are your materials, any subcontractor or helper pay, mileage, and your own hours at a rate you would pay someone else to work them. Divide that profit by the amount billed and you get margin = job profit ÷ quote. Subtract daily overhead across the days on site for net profit after running costs. The calculator above does all of it as you type — enter the quote, your costs and your hours.
What gross profit and margin mean
Gross profit is what is left after you subtract job costs from the quote. Gross margin is that profit as a percentage of the quote. A small job at 50% margin can beat a big job at 10%. Margin tells you how hard each dollar of turnover is working, so you know which work to take more of and which to quote higher or walk away from.
Do not double count your own time
Materials and subcontractor pay belong in the cost list. Your own hours belong in the "Your own hours on the job" field, not the cost list, or the job looks less profitable than it actually was. Enter each cost once, in the right place, and "What your own hours earned" tells you what your time was really worth on this job.
How this calculator works
Quote minus your named costs gives gross profit. Divide by the quote for margin. Add daily overhead and days on site for net profit after running costs. Add your hours for an effective hourly rate. Everything updates as you type. Numbers stay in your browser unless you choose to email yourself a branded PDF report. For a deeper walkthrough, see the complete job costing guide and tracking job costs from receipts.
Margin ranges described here are typical for a trades job, not universal accounting benchmarks.
Job profitability questions
What is job profitability?+
Job profitability is what a single job made you after every cost that belongs to it — materials, labor, subcontractors and mileage — is subtracted from what you billed. It is shown as a dollar figure (gross profit) and as a percentage of the quote (margin).
How do you calculate job profit?+
Job profit is the amount billed minus job costs: materials, any subcontractor or helper pay, mileage, and your own hours at a fair rate. Divide that profit by the amount billed to get your margin as a percentage. Subtract daily overhead for net profit after running costs.
What is a good profit margin on a job?
It varies by trade and job type, but many trades aim for a gross margin somewhere in the 30 to 50 percent range on labor-and-materials work. A small job at 50 percent can beat a big job at 10 percent, so track margin per job rather than chasing revenue.
Is job profit the same as gross profit?
At the job level they usually mean the same thing: what is left after direct job costs are taken off the quote. Subtract daily overhead as well and you get net profit, which is what the job made after a share of your running costs.
Learn more
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