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Profit margin calculator for contractors

Your profit margin is the share of the price left after costs. On construction work a healthy gross margin runs about 25–50% depending on the trade. Enter your costs or your price to get margin, markup and net profit instantly.

Last updated July 2026 · General guidance, not financial advice

Find your selling price

Total cost (COGS)

Materials + labour

Overhead %

Insurance, tools, vehicle, office

Target profit margin %

Share of the price you keep — typically 20–40% for trades

Results

Enter your numbers and hit Calculate to see results.

Markup vs margin

Two ways to describe the same profit — mixing them up is the fastest way to underprice a job.

Margin

Margin is profit as a share of the selling price — how much of the price you keep. A 50% markup is only a 33% margin.

Margin = (Price − Cost) / Price × 100

Markup

Markup is profit as a share of your cost — how much you add on top to set the price. For the same job, markup is always a bigger number than margin.

Markup = (Price − Cost) / Cost × 100

Markup vs margin: the same job, two numbers
Markup	Margin
10%	9.1%
20%	16.7%
30%	23.1%
50%	33.3%
80%	44.4%
100%	50.0%

What's a good profit margin in construction?

Typical gross margin ranges by type of work. Adjust for your overhead and local market.

Type of work	Gross margin	Notes
Renovation / remodelling	25–40%	Fit-outs, second-fix, refurb
Repairs / call-outs	40–60%	Speed and availability priced in
New build / structural	15–25%	Higher volumes, thinner margin
Subcontracting	10–20%	Lower margin, less sales risk

As a rule of thumb, many contractors target a 1.5×–1.8× markup on labour-plus-materials jobs. Remember: direct costs + overhead = total cost, then add margin to reach the price.

Frequently asked questions

How do I calculate profit margin on a construction job?: Add your direct costs (materials + labour) and overhead to get your total cost, then apply your margin to set the price. Margin = (price − cost) / price × 100. The calculator above works it out both ways.
What's the difference between markup and margin?: Markup is measured against your cost; margin against your selling price. A 50% markup is only a 33% margin. Confusing the two is the fastest way to underprice a job.
What is a good profit margin for a contractor?: A healthy gross margin is roughly 25–50% depending on the trade — higher on repairs and call-outs, thinner on new build and subcontracting. Below 15% net, profitability gets fragile.
What's the difference between gross and net profit margin?: Gross margin subtracts only the direct job costs. Net margin also subtracts overhead, tax and interest — what's actually left. Aim for a healthy gross margin so the net stays positive.
How much should I mark up materials and labour?: Many trades use a 1.5×–1.8× markup (a 50–80% markup) on labour-plus-materials to cover overhead and profit. The right number depends on your overhead and local market.
Is markup the same as profit?: No. Markup sets the price; profit is what's left after every cost. A high markup with high overhead can still leave a thin profit — always check the margin.

Sources

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Markup vs margin

Two ways to describe the same profit — mixing them up is the fastest way to underprice a job.

Margin

Margin is profit as a share of the selling price — how much of the price you keep. A 50% markup is only a 33% margin.

Margin = (Price − Cost) / Price × 100

Markup

Markup is profit as a share of your cost — how much you add on top to set the price. For the same job, markup is always a bigger number than margin.

Markup = (Price − Cost) / Cost × 100

Markup vs margin: the same job, two numbers
Markup	Margin
10%	9.1%
20%	16.7%
30%	23.1%
50%	33.3%
80%	44.4%
100%	50.0%

What's a good profit margin in construction?

Typical gross margin ranges by type of work. Adjust for your overhead and local market.

Type of work	Gross margin	Notes
Renovation / remodelling	25–40%	Fit-outs, second-fix, refurb
Repairs / call-outs	40–60%	Speed and availability priced in
New build / structural	15–25%	Higher volumes, thinner margin
Subcontracting	10–20%	Lower margin, less sales risk

As a rule of thumb, many contractors target a 1.5×–1.8× markup on labour-plus-materials jobs. Remember: direct costs + overhead = total cost, then add margin to reach the price.

Frequently asked questions

How do I calculate profit margin on a construction job?

Add your direct costs (materials + labour) and overhead to get your total cost, then apply your margin to set the price. Margin = (price − cost) / price × 100. The calculator above works it out both ways.

What's the difference between markup and margin?

Markup is measured against your cost; margin against your selling price. A 50% markup is only a 33% margin. Confusing the two is the fastest way to underprice a job.

What is a good profit margin for a contractor?

A healthy gross margin is roughly 25–50% depending on the trade — higher on repairs and call-outs, thinner on new build and subcontracting. Below 15% net, profitability gets fragile.

What's the difference between gross and net profit margin?

Gross margin subtracts only the direct job costs. Net margin also subtracts overhead, tax and interest — what's actually left. Aim for a healthy gross margin so the net stays positive.

How much should I mark up materials and labour?

Many trades use a 1.5×–1.8× markup (a 50–80% markup) on labour-plus-materials to cover overhead and profit. The right number depends on your overhead and local market.

Is markup the same as profit?

No. Markup sets the price; profit is what's left after every cost. A high markup with high overhead can still leave a thin profit — always check the margin.