Profit Margin Calculator
Calculate your gross profit margin, net profit margin and markup percentage from any job or business revenue and cost figures. See instantly if your pricing is delivering the margins you need to stay profitable.
🔨 Profit Margin Calculator
📐 How It Works
Gross profit margin is revenue minus direct job costs, expressed as a percentage of revenue. Net margin also deducts overhead costs. Both are calculated on revenue (selling price). Markup is calculated on cost. These are different ratios — a 25% markup gives a 20% gross margin.
📋 Worked Example
Plumbing job: Revenue $8,500. Materials $2,200, labour $3,800. Direct cost = $6,000. Gross profit = $2,500. Gross margin = $2,500 ÷ $8,500 = 29.4%. Overhead allocation $600. Net profit = $1,900. Net margin = 22.4%. Markup = $2,500 ÷ $6,000 = 41.7%.
❓ Frequently Asked Questions
Gross margins vary by trade: specialist trades 30–50%, general contractors 15–25%, subcontractors 10–20%. Net margin (after all overheads) should be at least 10–15% for a viable business. Margins below 10% net leave no buffer for slow periods, bad debts or unexpected costs.
Gross margin deducts only direct job costs (materials, labour, subcontractors). Net margin also deducts overhead costs (insurance, vehicle, tools, admin, marketing). Gross margin tells you how well you're pricing jobs. Net margin tells you whether the business is actually profitable.
Because they're calculated on different bases. Markup is profit divided by cost. Margin is profit divided by revenue. A 50% markup on a $10,000 cost = $15,000 revenue, $5,000 profit = 33.3% margin. They will never be equal unless profit is zero.
Yes — if you're working on the job, include a wage for your time at the market rate for your trade. This ensures the job is profitable even accounting for your labour. Many owner-operators skip this and confuse revenue with profit.