Is my own pay a fixed cost or profit?

Both, depending on how you take it. If you pay yourself a set salary every month regardless of what the business does, it is a fixed cost and belongs in overhead. If you take what is left, it is profit and belongs in the target rather than the break-even. Most owners in this trade do a bit of each, which is why this calculator lets you enter them separately.

How many working days should I use?

Twenty-one is the usual weekday average. If you run Saturdays, or if your trade has a genuine seasonal shape — HVAC and roofing both do — it is worth running it twice, once on a busy-month day count and once on a slow-month one. The gap between those two daily targets is the size of your seasonality problem.

What if my gross margin is different on different work?

Then use a weighted average across your actual revenue mix, and treat the result as a company-level number. If install runs 35 percent and service runs 55 percent and they are half your revenue each, your blended margin is 45 percent. If those two lines are very different sizes, the blended number can hide a lot, which is the case for tracking them separately in the books.

Free tool

Break-even calculator for contractors

Break-even is the number that tells you whether a slow week is a problem or a rounding error. It is your fixed overhead divided by the margin you keep on the work — and once you know it per day and per truck, you can read your own schedule.

Method reviewed by Darren Lim, US CPALicence CPA.74253602

Free · No email required · Nothing leaves your browser

Break-even, per truck, per day

$510

Each truck has to produce this before the company makes a dollar. Below it, the day cost you money however full the schedule looked.

Break-even revenue per month$42,857

Break-even per day$2,041

Break-even per truck per day$510

Break-even per year$514,286

With your pay covered$737 per truck per day$61,905/mo

With 10% net profit too$967 per truck per day$81,250/mo

Every $1,000 of overhead addsof revenue you have to find, just to stand still$2,381/mo

A 5-point margin slip costsin extra revenue needed to break even at the same overhead$5,792/mo

Nothing you type here is sent anywhere. The calculation runs in your browser, and your figures stay on this device.

The two numbers it needs

Fixed overhead is everything you pay whether or not the phone rings: rent, insurance, truck payments, software, office wages, your own draw if you take a fixed one, loan payments, advertising you have committed to. It is not materials and it is not field labour — those move with the work and belong on the other side.

Gross margin is what is left of a dollar of revenue after the direct cost of doing that work. If a $1,000 job costs you $600 in materials, field labour and subs, your gross margin is 40 percent. Take this off your P&L rather than off instinct; almost every owner who guesses guesses high.

Why the daily number is the one that changes behaviour

Monthly break-even is useful once a month. A per-day, per-truck target is useful at four in the afternoon, which is when decisions actually get made — whether to squeeze in one more call, whether to send a truck out on a job you are not sure about, whether the discount you are about to give still leaves the day above water.

It also makes a slow week legible. Three trucks under target for four days is a specific hole with a specific size, not a vague feeling that things are quiet. You can decide what to do about a number. You cannot decide what to do about a feeling.

What break-even does not include

Break-even is survival, not success. It covers your fixed costs and nothing else — no profit, no reinvestment, no reserve for the slow season, and no return for the risk you carry personally. That is why this also gives you a target that includes the owner pay and profit you enter, which is the number worth actually managing to.

It also assumes your gross margin holds. If your margin slips because material prices moved or because you took on work that costs more than you thought, break-even rises without anything visible changing. This is the argument for recalculating it every time a fixed cost changes rather than once a year.

Common questions

Is my own pay a fixed cost or profit?: Both, depending on how you take it. If you pay yourself a set salary every month regardless of what the business does, it is a fixed cost and belongs in overhead. If you take what is left, it is profit and belongs in the target rather than the break-even. Most owners in this trade do a bit of each, which is why this calculator lets you enter them separately.
How many working days should I use?: Twenty-one is the usual weekday average. If you run Saturdays, or if your trade has a genuine seasonal shape — HVAC and roofing both do — it is worth running it twice, once on a busy-month day count and once on a slow-month one. The gap between those two daily targets is the size of your seasonality problem.
What if my gross margin is different on different work?: Then use a weighted average across your actual revenue mix, and treat the result as a company-level number. If install runs 35 percent and service runs 55 percent and they are half your revenue each, your blended margin is 45 percent. If those two lines are very different sizes, the blended number can hide a lot, which is the case for tracking them separately in the books.

What we do about it

Break-even sits in your monthly pack — the company number, and the per-truck or per-crew daily target underneath it — recalculated every time a fixed cost changes rather than once a year when you remember to ask.