Most contractors know their labor rate and materials cost. Fewer systematically account for overhead — the cost of being in business that applies to every job. This calculator makes sure you are covering all three before setting a price.
Overhead is every cost of running your business not directly tied to a specific job: truck payments and fuel, insurance, tools maintenance, phone, software, marketing, and estimating time. 20-30% of labor is a typical overhead rate for a small trade business.
Margin vs. markup: A 35% margin is NOT the same as a 35% markup. This calculator uses margin — the percentage of the selling price that is profit. See the markup/margin tool for the full explanation of why this matters.
Overhead as a percentage of labor typically runs 20-35% for a small trade business with one to five employees. Higher overhead percentages are normal for businesses with significant equipment or office staff. Track actual overhead costs for 90 days to know your real number.
Residential trade contractors typically target 30-45% gross margin. Commercial contractors often target 15-25%. Net profit after all business expenses for a healthy small contractor is typically 8-15%.
Yes. Your time is a cost. If you do labor on the job, include your hours at a market labor rate. If you do not value your own time, you will underprice work and stay busy without building the business.
Estimating is what you do before the job to set the price. Job costing is what you do after to compare actual costs to estimated costs. Both use the same framework but job costing reveals whether your estimates are accurate.
Recalculate any time your fixed costs change materially — new equipment, different insurance, added staff. Once per quarter is a reasonable baseline for an actively growing business.