Contractor Job Pricing & Profit Calculator
Build a bid from labor, materials, subs, overhead, and contingency, then price it to hit a target profit margin.
ESTIMATE
Date: November 3, 2026
Valid until: December 3, 2026
| Total estimated price | $0.00 |
This is an estimate, not a binding contract or approved agreement. Final pricing may change if the scope, site conditions, or material costs change. Prices exclude sales tax unless stated.
What this calculator does
Pricing a job by gut feel or a flat markup tends to under-recover overhead on small jobs and miss the margin you meant to earn. This calculator builds the price from the ground up: it totals what the job will actually cost you, adds your share of overhead and a contingency buffer, and then sets the selling price so the profit equals your target percentage of the price.
Inputs explained
- Labor hours and burdened labor cost — total crew hours times your true cost per hour, including payroll taxes, insurance, and benefits.
- Materials — add line items with quantity and unit cost, or leave quantity blank for a lump sum.
- Subcontractors, equipment, travel, permits, misc. — any other cost that exists only because of this job.
- Overhead — either a percentage of direct cost or a fixed dollar allocation.
- Contingency — a percentage of direct cost held for unknowns.
- Target profit margin — the share of the final price you want to keep as profit.
Formulas
Direct cost = labor + materials + subs + equipment + travel + permits + misc.Overhead = fixed amountordirect cost × overhead %Contingency = direct cost × contingency %Total cost = direct cost + overhead + contingencySelling price = total cost ÷ (1 − target margin)Profit = selling price − total costMargin = profit ÷ selling price × 100
Overhead and contingency are both calculated from direct cost, never from each other, so nothing is counted twice.
Worked example
A small remodel needs 40 labor hours at a $55 burdened cost ($2,200), $2,250 of materials, a $1,200 subcontractor, $250 in equipment rental, $100 in travel, and a $150 permit.
- Direct cost: $6,150
- Overhead at 10%: $615
- Contingency at 5%: $307.50
- Total estimated cost: $7,072.50
- Price at a 20% margin: $7,072.50 ÷ 0.80 = $8,840.63
- Profit: $1,768.13 — a 20% margin, equal to a 25% markup on cost.
Use the "Load example values" button above to see these numbers in the calculator.
Assumptions
- All amounts are pre-tax, in US dollars. Sales tax on materials or the final invoice is not added.
- The labor rate you enter already includes burden.
- Contingency is treated as a cost, not as profit.
Limitations
- The result is only as accurate as your cost inputs and overhead rate.
- It does not model financing costs, payment schedules, retainage, or warranty reserves.
- It does not account for local market pricing — a mathematically correct price can still be above or below what your market will pay.
Frequently asked questions
What is the difference between markup and margin?+
Markup is profit divided by cost. Margin is profit divided by selling price. A job that costs $10,000 and sells for $12,500 has a 25% markup but a 20% margin. Applying a 20% markup when you meant a 20% margin leaves you at roughly 16.7% margin — a common reason contractors earn less than they planned.
Should I include labor burden in the hourly rate or in overhead?+
Put burden (payroll taxes, workers' comp, benefits, paid time off) into the burdened hourly labor cost. Do not add it again in overhead. Overhead should cover costs that aren't tied to a specific job, such as office rent, insurance, vehicles, and admin salaries.
Is contingency the same as profit?+
No. Contingency is a cost allowance for unknowns — hidden damage, price swings, small scope gaps. If it isn't used, it becomes extra profit, but you shouldn't count on that. This calculator applies contingency to direct cost only, so it is never compounded with overhead.
Why can't the target margin be 100%?+
Price = cost ÷ (1 − margin). At 100% the divisor becomes zero, which would mean an infinite price. Any margin from 0% up to (but not including) 100% is accepted.
How do I pick an overhead percentage?+
Divide last year's total overhead by last year's total direct job costs. If you spent $120,000 on overhead and $800,000 on direct costs, your overhead rate is 15%. Use the fixed-amount option instead if you allocate overhead per job or per day.
Results are estimates for planning purposes. See our disclaimer.