Worked example
Enter $9,000 monthly overhead, $5,000 fixed payroll, $5,000 owner compensation, $500 debt commitments, a 40% contribution margin, $3,000 target profit, a $2,000 average job and 22 operating days. The model separates break-even revenue from profit-target revenue.
| Result | Calculated value |
|---|---|
| Monthly fixed commitments | $19,500.00 |
| Break-even monthly revenue | $48,750.00 |
| Revenue for target profit | $56,250.00 |
| Jobs per month at target | 28.13 |
These are fictional defaults for explaining the calculation, not a price or outcome claim.
How the calculation works
Break-even revenue equals fixed commitments divided by contribution margin. Contribution margin must be measured before the fixed costs entered here, so the same cost is not counted twice.
Read the related Serman Tools guide for definitions, limits and another worked example.
Workbook
The free calculator handles one scenario in your browser. Contractor Profit Toolkit keeps the related model in a downloadable workbook.
Frequently asked questions
What is contribution margin here?
It is revenue left after the variable costs that were not included in the fixed commitments entered above.
Should owner pay be included?
Include the compensation target if the plan treats it as a required monthly commitment; label it consistently with your accounting view.
Is this a market-rate recommendation?
No. It calculates from your inputs and does not claim a prevailing local price or guaranteed outcome.
How should overhead be entered?
Use a documented allocation that matches the period and cost pool, and avoid including the same overhead in another input.
What is the difference between markup and margin?
Markup divides profit by cost. Margin divides profit by selling price, so the same percentage does not produce the same price.
Can I use the result as a final quote?
Use it as a planning check, then confirm scope, taxes, terms, technical requirements and every cost that applies to the job.