ALTAIROPERATING SYSTEM

Free calculator

Job profitability calculator

A job can look good on the invoice and still lose money once labor, parts and its share of the office are counted. Enter one job to see what it actually left behind.

What the customer pays, before tax.

All paid technician hours on the job, including drive time.

Wage plus burden (taxes, insurance, benefits) — your cost, not your billed rate.

Parts and supplies at your cost.

Anything you paid someone else to do.

Annual overhead divided by annual revenue, as a %.

Net profit on this job

$705.00

Net margin 28.2%

Labor cost
$270.00
Direct cost (labor + materials + sub)
$1,170.00
Gross profit
$1,330.00
Gross margin
53.2%
Overhead allocated
$625.00
Net profit
$705.00
Net margin
28.2%

How to use this

  1. Pick a recent, finished job so the numbers are real, not estimated.
  2. Enter the revenue before sales tax.
  3. Use every paid hour on the job, including drive time and return trips, at your loaded cost per hour (wage plus burden). The labor rate calculator shows how to get that figure.
  4. Enter materials at what you paid, not what you charged.
  5. For overhead, use last year's total overhead divided by last year's revenue.
  6. Repeat for a few job types (service call, repair, replacement) to see which ones carry the business.

Assumptions

  • Overhead is allocated as a percentage of revenue. If you allocate overhead per labor hour instead, put it into the loaded hourly cost and set overhead to 0%.
  • Revenue excludes sales tax.
  • Warranty callbacks and financing or card fees are not included unless you add them to materials or subcontract.
  • Default values are placeholders to show how it works, not industry benchmarks.

The formula

labor cost     = labor hours × loaded labor cost per hour
direct cost    = labor cost + materials + subcontract
gross profit   = revenue − direct cost
gross margin   = gross profit ÷ revenue
overhead       = revenue × overhead allocation %
net profit     = gross profit − overhead
net margin     = net profit ÷ revenue

Disclaimer. Estimates only. This calculator is for planning and education; it is not financial, tax or legal advice. Results depend entirely on the numbers you enter. Verify your figures and decisions with your accountant.