JOB PROFIT GUIDE
How do I calculate the profit on a job?
Short answer: start with what the customer pays, subtract direct job costs, then compare what remains with the overhead, owner-pay and profit contribution the job needed to produce.
Start with revenue and direct costs
Direct costs include materials, subcontractors, permits, rentals, disposal and other expenses caused by that job.
Job contribution = job revenue − direct job costs
If a job brings in $3,000 and has $1,050 of direct costs, it produces $1,950 before overhead, owner pay and business profit.
Account for the hours the job consumed
Divide job contribution by actual productive hours to see what the job produced per hour.
Contribution per productive hour = job contribution ÷ actual productive hours
Do not confuse contribution with final net profit
The money left after materials is not automatically profit. The business still has insurance, vehicles, software, rent, phones, marketing, admin time and other overhead to support.
Compare estimate versus actual
- Compare estimated hours with actual hours.
- Compare estimated direct costs with actual costs.
- Compare actual contribution per hour with your business target.
The goal is to spot repeatable patterns so future jobs get priced more accurately.
Use your own numbers
JJL Business Tools turns these ideas into practical targets using your actual costs, time and income goals.
See the JJL Job Profitability Tracker