How profit margin is calculated
Margin = (price − cost) ÷ price × 100
A kitchen job that costs you $650 in materials, helpers and fuel and is priced at $1,000 has a profit of $350 and a margin of 35%. The same numbers give a markup of about 54%.
What goes into the cost of a job
- Materials and parts, at what you paid.
- Subcontractors and helpers.
- Your own labor, at the hourly rate you need (the hourly rate calculator finds it). Leaving your own time out makes every job look more profitable than it is.
- Equipment rental, disposal fees, permits.
- Travel: fuel and time.
Overheads like insurance and your phone are easier to cover through your hourly rate than to split across individual jobs.
Finding the price for a target margin
To reach a target margin, divide the cost by (1 − margin). For a 35% margin on a $650 job: $650 ÷ 0.65 = $1,000. Adding 35% to the cost instead gives only $877.50 and a margin of about 26%.
Once the price is set, send it as an estimate and convert it to an invoice when the job is done.
Last checked October 23, 2026.