Worked example
Enter $500 of materials, 10 labor hours at $40, $50 of equipment, $25 of travel, $25 of permits, $100 of overhead, a 5% reserve and a 30% target margin. The calculator totals each cost before converting cost into price.
| Result | Calculated value |
|---|---|
| True job cost | $1,155.00 |
| Break-even price | $1,155.00 |
| Target selling price | $1,650.00 |
| Planned profit at target price | $495.00 |
These are fictional defaults for explaining the calculation, not a price or outcome claim.
How the calculation works
True job cost equals direct costs plus allocated overhead and the reserve. Target price equals true job cost divided by one minus the target margin.
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
Should labor use wage or true hourly cost?
Use true productive-hour cost, including the employer costs you actually incur. Wage alone can understate labor cost.
Where do subcontractors belong?
Enter subcontractor invoices separately from employee labor so the same work is not counted twice.
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.