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Job profit calculator
Most contractors know whether the company made money last year. Far fewer know which jobs made it. This costs a single job the way it should be costed, including the two things owners routinely leave out: the loaded labour rate, and the callback that came six weeks later.
Method reviewed by Darren Lim, US CPALicence CPA.74253602Free · No email required · Nothing leaves your browser
Your numbers
This job made
$552
6.5% net, after this job carried its share of running the business.
Not sure what your loaded labour rate is? Work it out here. Nothing you type is sent anywhere.
The two costs that get left out
The first is loaded labour. Owners cost jobs at the wage because the wage is the number they know. Costing eight hours at $28 instead of at the burdened, non-billable-adjusted rate of $46 understates that job by $144, and it understates every job the same way, which is how a whole category of work can look profitable for years while quietly losing money.
The second is warranty and callbacks. The return visit lands weeks after the job closed, gets booked as its own ticket or as general labour, and never finds its way back to the job that caused it. Carrying an allowance on every job — a percentage you take off your own callback history — is the only practical way to make it visible.
Gross margin against net
Gross margin is price minus direct costs: what the job produced before the business it belongs to is paid for. Net is what is left after that job carries its share of rent, insurance, the office, the software and everything else that had to exist for the job to happen at all.
Both matter and they answer different questions. Gross margin tells you whether the job was priced right. Net tells you whether it was worth doing. A job at 30 percent gross that absorbed 28 percent overhead made two points, and two points does not pay for the risk of a truck, a crew and a warranty.
Running it on the jobs that matter
The useful exercise is not one job. It is your five biggest jobs from last quarter, your five smallest, and the two you argued about. Patterns show up fast — usually that a specific customer type, a specific job size, or a specific crew is where the margin goes.
The other pattern worth looking for is the discount. Take a job you priced normally and rerun it at the number you actually agreed after the customer pushed back. The percentage off the price is almost never the percentage off the profit; on a 30 percent gross margin job, a 10 percent discount takes a third of the profit with it.
Common questions
- What overhead rate should I use?
- Your annual fixed overhead divided by your annual revenue, as a percentage. If you run $240,000 of overhead on $1.2M of revenue, that is 20 percent, and every job should be expected to carry roughly 20 cents in the dollar. If you do not know your overhead figure yet, the break-even calculator on this site works it out from the same inputs.
- What is a reasonable callback allowance?
- It depends entirely on your trade and your work. The honest way to get it is to total the labour and material you spent on warranty and callback work last year and divide it by last year’s revenue. Owners who have never measured it are usually surprised, and the number is almost always worth knowing before you price the next twelve months.
- Should I include the salesperson or estimator?
- If they are paid commission on the job, yes — it is a direct cost of that job and belongs above the gross margin line. If they are salaried regardless, they are overhead and belong in the overhead percentage. The test is whether the cost would have existed if the job had not.
What we do about it
We build job-level separation into the books from the first month, in your trade’s own terms — install against service, insurance against retail, per truck, per route — so this arrives every month instead of when you remember to work one out by hand.