Free Tool
Contractor Profit Margin Calculator
Plug in last year's numbers and see what your contracting business is actually keeping — gross margin, net margin, the revenue you need just to break even, and the markup required to hit your target profit. No email, no signup.
Your Numbers
Gross Profit
$360,000
Gross Margin
30.0%
Net Profit
$120,000
Net Margin
10.0%
What It Means
Break-even revenue: $800,000. At your current gross margin, that's how much work you have to sell each year just to cover overhead — everything above it is profit.
Revenue needed for a 15% net margin: $1,600,000. If that number looks impossible, the fix isn't more volume — it's pricing and job costing.
Markup on direct cost required: 50.0%. This is what you'd need to add on top of labor, materials, and subs on every job to hit your target at today's volume.
Profit gap: $60,000. That's the money sitting between where you are and your target — usually found in mispriced job types, unbilled change orders, and overhead that grew faster than revenue.
How to Read It
Three Numbers Every Contractor Should Know Cold
Gross Margin by Job Type
Company-wide gross margin hides the truth. Run this calculator once for each job type — service calls, remodels, new construction — and you'll usually find one category quietly funding another that loses money on every ticket.
Overhead Recovery
Overhead doesn't get billed to a customer directly, so it has to be recovered inside your margin. Break-even revenue tells you how much work it takes to carry the office before a dollar of profit shows up.
Markup vs. Margin
A 20% markup is not a 20% margin — it's about 16.7%. Bidding markup as if it were margin is the single most common reason busy contractors finish the year with nothing in the bank.
FAQ
Frequently Asked Questions
Not Sure Your Inputs Are Right?
Most contractors are surprised by what belongs in job cost versus overhead — and that one reclassification changes the whole picture. See how other Oklahoma City contractors closed the gap, or bring your numbers to a free 30-minute profit audit.