Business Free

Profit Margin Calculator

Enter project revenue and costs, see gross margin, markup %, and profit. Pre-loaded with general contractor industry benchmarks.

Project Costs

Results

Net Profit
--
Profit Margin
--
Markup
--
Cost per $1 Revenue
--

Cost Breakdown

GC Industry Benchmarks

GC Target Margin 15 – 25%
Remodeling Contractors 20 – 30%
Large Builders 10 – 15%
Your Profit Margin --
📊

Save this calculation to your account

Create a free account to save your results, track your numbers over time, and download a branded PDF you can share with your accountant.

Email these results to yourself

Get a copy you can reference on the job site or attach to a quote.

How to Use This Calculator

1. Enter your project revenue. This is the total amount you charge the customer or the contract value. Include everything: materials, labor, subcontractors, permits, and your fee.

2. Break down your project costs. Enter materials (lumber, concrete, drywall, etc.), labor (your crew's burdened cost), subcontractor invoices, equipment rental, permits, and overhead allocation for this project.

3. Review your margin. The calculator shows your net profit in dollars and as a percentage of revenue. Compare it to the GC industry benchmarks below the results.

How Profit Margin Works for GCs

Margin and markup describe the same profit from different angles. Margin is profit as a percentage of the selling price (revenue). Markup is profit as a percentage of your cost. Confusing the two is one of the most common pricing mistakes in construction.

Total_Cost = Materials + Labor + Subs + Equipment + Permits + Overhead

Profit = Revenue - Total_Cost

Margin% = (Profit / Revenue) x 100

Markup% = (Profit / Total_Cost) x 100

The "Cost per dollar of revenue" metric tells you how much of every dollar goes to costs. If it is $0.74, you keep $0.26 in profit for every $1 collected.

When To Use This

After completing a project. Plug in the actual numbers once the final invoice is paid. Compare your real margin to what you estimated during the bid. If there is a gap, figure out whether it was labor overrun, unexpected materials, scope creep, or sub overages.

When bidding new work. Before you submit a proposal, run the numbers here to make sure you are hitting your target margin. Adjust the revenue up or down until you land in the 15-25% range.

During annual business review. Pull your average project revenue, typical cost breakdown, and see where your overall margin lands relative to industry benchmarks.

Frequently Asked Questions

What is a good profit margin for a general contractor?
General contractors should target a net profit margin of 15-25% on most projects. Remodeling contractors typically aim for 20-30%. Large production builders often operate on thinner margins of 10-15% due to volume.
What is the difference between margin and markup for contractors?
Margin is profit as a percentage of revenue. Markup is profit as a percentage of cost. A $50,000 project costing $35,000 has a 30% margin and a 42.9% markup. They describe the same profit from different reference points.
How do I calculate overhead for a construction project?
Overhead includes all costs not tied to a specific project: office rent, insurance, vehicles, admin staff, software, marketing, and utilities. Most GCs allocate overhead as a percentage of revenue, typically 15-30%.
Why is my contractor profit margin so low?
Common causes include underpricing labor, insufficient materials markup, untracked overhead allocation, scope creep without change orders, and underestimating subcontractor management costs.

Related General Contractor Tools

Business

Labor Rate

Find out what you actually need to charge per hour to be profitable.

 Business

Markup to Margin

Convert markup to margin (and back) with a handy truth table.

 Business

Overhead Calculator

Know your true break-even by adding up all GC business costs.

 Business

Sub Markup

Calculate the right markup on sub invoices for overhead and profit.
← View all General Contractor tools