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Job Profit Margin illustration

Construction · Margin

Job Profit Margin

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Use this to check the profit margin on a job by comparing the bid price against everything the job actually cost.

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Interactive workbench

Completed job

Bid Price−Total CostBid Price

A $12,500 bid costing $10,000 yields a 20% profit margin.

Step 1 of 3

Variables and units

  • Bid Price

    Price quoted to the client.

    currency

  • Total Cost

    Material plus labor plus overhead for the job.

    currency

Common mistakes

  • Leaving overhead out of total cost.
  • Confusing markup with margin.

Step-by-step example

Completed job

  1. 1. Start with the example inputs

    • Bid Price$12,500
    • Total Cost$10,000

  2. 2. Apply the formula

    Bid Price−Total CostBid Price

  3. 3. Run the numbers

    20%

    A $12,500 bid costing $10,000 yields a 20% profit margin.

What this result means

A job margin of 20% is the share of the bid you keep after total cost. It has to fund overhead and profit; if change orders and surprises routinely eat it, the fix is in estimating and markup, not in working faster.