Job Profitability Calculator
Direct costs alone lie. Include overhead the way the pros do and see what this job is really making you.
How to calculate true job profitability
Job profitability is what a project earns after every direct cost and its fair share of overhead. Most contractors track the first part and skip the second, which is how a job that shows a healthy gross profit still leaves the company short at the end of the year. Overhead does not disappear because it was not assigned to a job — it just gets paid out of the profit of every other job.
This calculator takes the contract amount, the four direct cost buckets — materials, field labor, subcontractors, and equipment — and an overhead rate, then returns gross profit, net profit after overhead allocation, and the break-even bid price. That last number is the one to write down: bid below it and the job loses money no matter how well the crew performs.
The job costing math
Direct job cost
Materials + labor + subs + equipment
Burdened labor only — include payroll taxes, workers' comp, and benefits, or field cost is understated by 20-35%.
Allocated overhead
Contract amount × Overhead rate
Overhead rate = annual overhead ÷ annual revenue. Recalculate it yearly, not once when you started the company.
Break-even bid price
Direct cost ÷ (1 − Overhead rate)
The floor. Note it is a division, not an addition — adding your overhead percentage to cost always underprices the job.
How to read your result
Gross profit is not job profit
A job with 30% gross margin and a 20% overhead rate nets about 10%. One change order absorbed without a signed price, or two days of rework, can erase that entirely.
Labor burden is where estimates break
A $28 an hour framer costs $36 to $40 fully burdened once taxes, comp, and benefits are counted. Estimating at the base wage builds a loss into every bid before the first material order.
Track cost by job, not by month
A monthly P&L tells you the company made money. Job-level costing tells you which work to bid more of and which customer to stop chasing — and it is what surety and bank underwriters ask to see.
Frequently asked questions
+How do you calculate job profitability in construction?
Subtract direct job costs — materials, burdened field labor, subcontractors, and equipment — from the contract amount to get gross profit, then subtract allocated overhead to get net job profit. Divide net profit by the contract amount for the job's net margin.
+What overhead rate should a contractor use?
Divide total annual overhead (office rent, admin salaries, insurance, trucks, software, owner pay not charged to jobs) by annual revenue. Most small contractors land between 10% and 25%. Using a rate you set years ago is one of the most common bidding errors we see.
+What is labor burden and how do I calculate it?
Labor burden is everything you pay above the base wage: payroll taxes, workers' compensation, general liability, benefits, and paid time off. Divide total annual burden by total annual base wages to get a burden rate, then apply it to every hour you estimate. Typical rates run 25% to 40%.
+Should retainage be included in job profit?
Include the full contract amount in the profit calculation, but track retainage separately as a receivable. Retainage affects cash, not profitability — a job can be profitable and still tie up 10% of its value for months after completion.
+Why should I track WIP on construction jobs?
Work-in-progress schedules match revenue to the percentage of the job completed, which stops profit from swinging wildly between months. Bonding companies and banks require them, and they reveal over- and under-billing while the job is still running.
Want job costing that runs automatically?
We set up job-level cost tracking in your accounting software, apply a real labor burden and overhead rate, and produce WIP schedules your bonding agent and banker will accept — so every bid starts from a number you can trust.
Want us to review these numbers with you?
Share a few details and we'll follow up within one business day with tailored next steps — no pressure, no obligation.
Need this done for you?
This calculator is only as accurate as the books behind it. Here's where to go next.
- Bookkeeping for Houston contractorsJob costing, WIP schedules, and retainage tracked the way lenders expect.Open Bookkeeping for Houston contractors
- Monthly bookkeeping & cleanup servicesWe keep job costs and overhead allocation accurate every month.Open Monthly bookkeeping & cleanup services
- Contractors in Tomball & north HoustonLocal bookkeeping for builders and specialty trades.Open Contractors in Tomball & north Houston