How to calculate true job cost and profit
Job revenue is not job profit. Complete costing separates the customer price from every cost required to deliver the work.
What is job costing?
Job costing is the process of assigning the revenue and costs of a specific job so you can see what that job actually earned. For a service business, contractor or freelancer, the calculation should go beyond materials alone. Labor, travel, subcontractors, payment fees, job-specific supplies and a reasonable share of overhead can all reduce the amount that remains after the customer pays. A quote can look profitable until those less visible costs are included.
What costs should be included?
Start with direct costs created by the job: materials, rented equipment, subcontractors, mileage, disposal, shipping or other purchases that would not exist without the work. Then include complete labor cost rather than only the employee's take-home wage. Employer taxes, benefits and other labor burden may matter. Finally, allocate overhead such as software, insurance, office costs or vehicles when those costs support the work but are not tied to one line item.
Profit margin and markup are different
Profit margin compares profit with the selling price. Markup compares profit with cost. A job that costs 100 and sells for 150 has a 50% markup on cost, but the margin is only 33.3% of revenue. Confusing the two can lead to underpricing. If you only need a fast comparison between cost, price, margin and markup, use the Profit Margin Calculator. For a quote built from hours, materials and a target margin, the Service Pricing Calculator is another useful starting point.
Why effective hourly earnings matter
Two jobs can produce the same profit while consuming very different amounts of owner or crew time. Dividing job profit by the real labor hours gives an effective hourly return and makes jobs easier to compare. Include travel, setup, cleanup, administration and other required time when those hours are part of delivering the work. A job that appears attractive on margin alone may be weak if it consumes a full day that could have been used for higher-value work.
Use target pricing as a decision tool
A target quote is useful when you already know the complete cost base and want to solve for a desired margin. Percentage payment fees also need to be considered because they rise as the selling price rises. The calculator can show when a target becomes mathematically impossible, such as when the target margin plus percentage fees leaves no room for underlying costs. Treat the result as a planning number and check taxes, contract requirements and market conditions separately.
Estimate before the job, measure after it
Pre-job costing protects the quote; post-job costing improves the next quote. After completion, replace estimates with actual labor, materials and other costs. Repeated comparisons reveal which job types, customers or service packages are consistently stronger. The paid Job Profit Calculator is designed for that repeated workflow, while the free calculator is ideal for a one-job decision. Once the price is ready, create a customer-facing document with the Free Quote Generator.
Local-first and private by default
Calculations run in your browser. The tool does not require an account, and Example mode is separated from your saved working inputs. You can copy the result, print only the calculated output or download a standalone HTML report. Browser storage is convenient working storage, not a permanent backup, so keep important business records in a location you control.
Frequently asked questions
What belongs in job cost?
Include labor, materials, subcontractors, travel, allocated overhead, payment fees and other costs created by the job.
What is the difference between markup and margin?
Markup compares profit with cost. Margin compares profit with the customer price.
Why can the target quote be unavailable?
A target margin plus percentage fees at or above 100% leaves no mathematical room for the underlying costs.