Worked example
For a $5,000 job, enter $1,200 of materials, 60 labor hours at $32.50, $300 of equipment, $400 of subcontractors, $500 of overhead and a 2% reserve. The result shows total cost, planning profit, margin and profit per labor hour.
| Result | Calculated value |
|---|---|
| Total entered cost | $4,450.00 |
| Planning profit | $550.00 |
| Planning margin | 11% |
| Margin versus target | -19% |
These are fictional defaults for explaining the calculation, not a price or outcome claim.
How the calculation works
Planning profit subtracts every entered cost, allocated overhead and reserve from revenue. It is a job-planning result, not accounting gross profit or taxable income.
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
Can this be used before and after a job?
Yes. Use estimated costs before quoting and replace them with actual costs after completion to compare the variance.
Why show profit per labor hour?
It helps compare jobs of different sizes that consume different amounts of scarce crew capacity.
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.