Enter your labor, material, and overhead costs plus your service price, and see your profit margin, profit, and markup update instantly. Free, and no signup needed.
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Understanding profit is crucial for any business owner who wants their work to be sustainable. Profit is not just about the money you make this month. It is a measure of the overall health of your business, and this calculator helps you see where you stand.
Profit margin is the share of your service price that you keep as profit after covering your costs. The formula is:
Profit Margin = [Service Price - (Labor + Material + Overhead)] / Service Price x 100The calculator does this for you. Enter your four numbers and it returns your profit margin as a percentage, your profit in dollars, and your markup.
Type in your labor costs, material costs, overhead expenses, and the price you charge for the service. The tool adds up your costs, subtracts them from your price to get your profit, and expresses that profit as a percentage of your price (margin) and of your costs (markup).
Profit is the financial gain left over when your revenue is greater than the costs, expenses, and taxes involved in running your business. It is a key indicator of success and the fuel for growth and reinvestment. There are four profit measures worth knowing:
What you make after deducting the cost of producing and selling your product, also called the cost of goods sold (COGS).
Gross Profit = Revenue - COGS Gross Profit Margin = (Gross Profit / Revenue) x 100Your actual profit after all expenses, including operating costs, interest, and taxes, are taken out of total revenue.
Net Profit = Revenue - Total Expenses Net Profit Margin = (Net Profit / Revenue) x 100The profit from your core operations, before interest and taxes.
Operating Profit = Gross Profit - Operating Expenses Operating Profit Margin = (Operating Profit / Revenue) x 100The share of sales revenue that becomes profit, a signal of how efficiently you manage sales and production.
Sales Margin = (Sales Revenue - COGS) / Sales Revenue x 100Revenue is the income generated by selling your goods and services. Profit is what remains after your business expenses, debts, and running costs are taken out. Revenue tells you how much is coming in, profit tells you how much you actually keep. Use the calculator to find out whether your pricing is turning a profit.
Both measure profitability, but they are calculated against different bases. Margin is profit as a percentage of your selling price. Markup is profit as a percentage of your cost. The same job can show a healthy markup and a more modest margin, so it helps to know which one you are quoting.
Work on both sides of the equation: grow revenue and trim costs.
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