Job Profitability Calculator
The quote said one number and the job cost another. Enter the price, what you estimated, and what it actually cost to see the margin you planned against the margin you got — and the overrun in dollars.
Method and content reviewed September 23, 2026 · formulas checked against a test suite · runs entirely in your browser
Actual margin = (Price − Actual cost) ÷ Price($4,000.00 − $3,050.00) ÷ $4,000.00 = 23.8%Behind plan by 11.3% of margin — -$450.00 of profit gone. That's 17.3% on cost, landing on a much smaller number.
Totals show that the estimate was wrong; they don't show where. Break the actuals into the same lines as the estimate — hours, materials, subs, trips — and the line that moved is usually the one worth fixing.
Electrical: where the number comes from
An electrical contractor finishes a lighting retrofit quoted at $4,000. The estimate assumed $2,600 of labor and materials; an extra day and a second parts trip took the real cost to $3,050. (Illustrative example — use your own job's actuals.)
| Input | Value |
|---|---|
| Contract price | $4,000 |
| Estimated cost | $2,600 |
| Actual cost | $3,050 |
Result: Over by $450 — the job's margin fell from 35% to 23.8%
A 17% cost overrun took 32% of the profit, because costs come out of the smallest number in the calculation. Holding the planned 35% margin on the real cost would have needed a $4,692 price. What the totals can't tell you is which line moved — compare the estimate's hours, invoices and trips against the actuals, then fix that input in the next estimate.
Load this example into the calculatorThe calculation
| Planned profit | $4,000 − $2,600 = $1,400.00 |
| Actual profit | $4,000 − $3,050 = $950.00 |
| Planned margin | $1,400 ÷ $4,000 = 35.0% |
| Actual margin | $950 ÷ $4,000 = 23.8% |
| Margin points lost | 35.0% − 23.8% = 11.3 points |
| Cost overrun | $3,050 − $2,600 = $450.00 (17.3%) |
| Price needed to hold 35% | $3,050 ÷ 0.65 = $4,692.31 |
How this calculator works
Every result comes from the formulas below — the math shown is the math used. Change any input and results update instantly in your browser; nothing is sent to a server.
- Planned profit:
Planned Profit = Price − Estimated Cost - Actual profit:
Actual Profit = Price − Actual Cost - Gross margin (planned and actual):
Margin % = Profit ÷ Price × 100Margins are stated on the contract price, so the gap between the two is measured in margin points — not in cost percentages. - Profit lost to the overrun:
Profit Variance = Estimated Cost − Actual CostEvery dollar a job overruns comes straight out of profit: costs rose, the selling price can't. - Cost overrun:
Overrun % = (Actual Cost − Estimated Cost) ÷ Estimated Cost × 100 - Price that would have held the margin:
Price = Actual Cost ÷ (1 − Planned Margin ÷ 100)Back-solves the quote you would have needed once the real cost was known.
What the result means
The actual margin is what the job really earned, measured on the price you were paid. Compare it against the planned margin: the difference in margin points is how much of your intended profit the cost overrun consumed, and the final row shows the price the real cost would have required.
When to use it
Use it on every completed job while your estimating data is thin — and on any job that felt like it went sideways. It's the only feedback loop that tells you which input in your estimates is wrong.
Want the concept behind the math in depth? Read Job Costing: Did the Job Actually Make Money? or How to Price a Job: A Complete Method for Contractors or Change Orders: Pricing Extra Work Without Giving the Margin Away.
Common mistakes
- Never checking actuals at all, so the same optimistic assumption survives in every future estimate.
- Comparing the overrun percentage to the margin: a 17% cost overrun on a 35%-margin job took 32% of the profit.
- Counting unpaid owner hours as free labor — that hides part of the overrun in a place you never look.
Frequently asked questions
What is job profitability (or job costing)?
It's comparing what a job actually cost to what you estimated, after the work is done. The estimate tells you what you intended; the actuals tell you what happened. The gap between them is the only feedback that improves your next estimate — which is why trades businesses that never check actuals keep repeating the same optimistic assumption.
Why does a small cost overrun cost so much margin?
Because costs come out of profit, and profit is the smallest number in the calculation. On a $4,000 job estimated at $2,600 of cost, the planned margin is 35%. If the job actually costs $3,050 — a 17% overrun — the margin becomes 23.8%: the cost rose 17%, but profit fell 32%. Percentage overruns on cost always land harder on profit.
How do I find out whether the overrun was labor or materials?
Totals can't tell you, so break the actuals into the same lines as the estimate: labor hours at your burdened rate, material invoices, subcontractor bills, trips, disposal and permits. Then compare line by line. In our experience of how these overruns are usually described in trade forums, undercounted hours and small forgotten costs (trips, fasteners, disposal) account for most of the damage — but confirm it with your own numbers.
A job made less margin than planned — should I raise my prices?
Not automatically. First decide which it was: a one-off surprise, a scope change you should have change-ordered, or a systematically optimistic estimate. Only the third one justifies changing your rates — and then the honest move is to fix the input that was wrong (hours, waste, overhead allowance) rather than adding a blanket cushion.
How often should I run a job profitability check?
On every completed job while your estimating data is thin, and on a sample of each job type once patterns appear. It takes a few minutes per job and it's the only way to know whether 'busy' is actually profitable. Keep the results: three or four jobs of the same type turn a guess into a range.
Now that you know the job's real costs, price the next one from those instead of the old estimate.
Re-price a job with real costs →Related tools and guides
Job Profitability Calculator is part of RateCraft, a set of free pricing and estimating tools for contractors and service businesses. Results are calculated entirely in your browser and are estimates for planning purposes — see our disclaimer and methodology.