How the calculator works
There are two honest ways to price a job, and the calculator keeps them separate so you never mix them by accident:
- Cost first → price. You know roughly what the job will cost you. Pick a target gross margin (or a markup) and get a suggested customer price.
- Price first → profit. You already have a number in mind, or the customer named one. Enter it and see the gross profit, margin and markup it leaves you.
What counts as a direct job cost
Direct costs are the ones this particular job causes. Include:
- Labour — hours × what an hour actually costs you (wages plus payroll costs, or the hourly pay you want for yourself) × crew size
- Materials and supplies used on the job
- Equipment rental or equipment you charge by the job
- Subcontractors, dump fees, permits and travel for this job
Leave out overhead that you pay regardless of the job — insurance, vehicle payments, phone, software, advertising. Your gross profit has to cover those, and whatever is left after overhead and income tax is what you actually take home.
Worked example
A two-day interior job (sample figures):
| Item | Amount |
|---|---|
| Labour: 16 h × $35 | $560 |
| Materials | $240 |
| Other job costs | $40 |
| Direct cost | $840 |
| Price for 40% margin: $840 ÷ 0.60 | $1,400 |
| Gross profit | $560 (40% margin, 66.7% markup) |
| Sales tax at 8% (added on top) | $112 |
| Customer pays | $1,512 |
The $112 of tax is not profit — you collect it and pass it on. If you had multiplied $840 by 1.40 instead, you would have quoted $1,176 and earned a 28.6% margin. See markup vs margin for the full explanation.
Material markup
Many contractors add a separate markup to materials. When you enter one, the calculator charges materials at cost plus that markup, then applies your target margin to the remaining costs. This is the same rule ScopeBid uses in the app, so a quote built there matches the number here.
Discounts eat margin fast
A discount comes straight out of gross profit. On the $1,400 job above, a 10% discount ($140) cuts gross profit from $560 to $420 — a quarter of your profit — and drops the margin from 40% to 33.3%. Switch to Price first mode and enter the discounted price to see the effect on your own job.
Common questions
How do I calculate profit margin on a job?
Subtract your direct job costs (labour, materials, equipment, subcontractors, other job expenses) from the price before tax, then divide by the price. Example: a $1,000 job that costs $600 has $400 gross profit and a 40% gross margin.
What price do I charge to hit a target margin?
Divide your cost by (1 − target margin). For a 40% margin on $600 of cost: $600 ÷ 0.60 = $1,000. Multiplying cost by 1.40 gives only $840, which is a 40% markup and a 28.6% margin.
Is gross profit the same as what I take home?
No. Gross profit is before overhead (vehicle, insurance, phone, software, unbilled time) and before income tax. Your take-home pay is what remains after all of those.
Should sales tax be included in my margin?
No. Sales tax, GST or HST collected from a customer is not your revenue. Calculate margin on the price before tax.