Estimate every project correctly every time with our free and easy-to-use calculator.
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Healthy profit margins for service businesses usually fall between 15% - 25%.
Our profit margin calculator tells you how much profit you’re making on a job. It compares the cost of performing the job to what you’re charging the customer. When the job is done, you’ll have a clear picture of how efficiently your team is working. Did they perform within budget? Take the knowledge gained from each job and use that data to inform future calculations.
A profit margin calculator is perfect for new entrepreneurs. It’s also great for seasoned business owners who hate manually tallying receipts, time sheets, and invoices. This tool offers a quick and easy way to calculate profit margins without the hassle of doing the math yourself.
Learning how to calculate profit margin is as easy as plugging numbers into this profit margin formula: [(Billable Revenue – (Cost Price + Overhead Expenses)) / Billable Revenue] × 100
To determine the total cost price of a job, use this simple formula: Total Cost Price = Labor Cost + Materials Cost
To determine the overhead expenses for a completed job, use this formula: Overhead Expenses = All Monthly Expenses / Working Hours Each Month) × Hours to Complete Job
Profit Margin Calculator Example:
Let’s say the billable revenue for a specific job is $4,000, while the total cost price for the job is $1,000 and the overhead expenses for the job total $1,000.In that case, the formula used to calculate the profit margin by the
calculator is:
[(4,000 (1,000+ 1,000)) / 4,000] × 100 = 50%
