Contractor Profit Margin Calculator
Calculate the right bid price for any job based on your costs and target profit margin. See cost composition, the difference between markup and margin, and what happens to your profit if costs run over by 10% or 20%.
Insurance, office, vehicle, etc.
Total crew hours — for profit/hour metric
Results
Total Job Cost
$15,000
all costs
Bid Price
$18,750
25.0% markup
Profit
$3,750
20% margin
Profit / Labor Hour
$47
$234 rev/hr
Cost Composition
Bid Price at Different Margins
10% margin
$16,667
$1,667 profit
15% margin
$17,647
$2,647 profit
20% margin
$18,750
$3,750 profit
25% margin
$20,000
$5,000 profit
30% margin
$21,429
$6,429 profit
35% margin
$23,077
$8,077 profit
Cost Overrun Stress Test
What happens to your profit if real-world costs come in over your estimate? (Bid price stays fixed at $18,750.)
On Budget
$3,750
20% margin
10% Overrun
$2,250
12.0% margin
20% Overrun
$750
4.0% margin
How to Use This Calculator
Enter all job costs — materials, labor, subcontractors, permits, equipment rental, and overhead allocation. Set your target profit margin (the percentage of the final bid that becomes profit). Add labor hours to see profit per hour worked. The calculator computes the correct bid price, shows cost composition, and stress-tests your margin against cost overruns.
Formula Used
Bid Price = Total Costs / (1 - Target Margin%). Markup% = Margin% / (100% - Margin%). Profit = Bid Price - Total Costs. Profit Per Labor Hour = Profit / Labor Hours.
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Disclaimer
This calculator is for estimation purposes only. Results may vary based on local conditions, materials, and building codes. Always consult a licensed professional before making decisions based on these calculations. MyContractorTools is not responsible for any errors or omissions.