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Contractor Markup, Profit Margin & Labor Rate Calculator

Calculate true contractor hourly billing rates, overhead recovery, and markup vs profit margin percentage to ensure project profitability.

Hourly Labor & Margin Inputs

$
What you pay yourself as personal wages per year.
$
Van payments, fuel, general liability insurance, software, tools, phone, marketing.
e.g. 48 weeks (allowing 4 weeks vacation/holidays).
Actual on-site billable trade hours (excluding driving & estimates).
Conservative (10%) % Margin Aggressive (35%+)

Calculated Rates & Target Revenue

True Breakeven Cost
$87.05
Per billable hour
Recommended Hourly Rate
$108.81
To hit 20% net margin
Total Annual Overhead & Wages: $117,000.00
Total Billable Hours / Year: 1,344 hrs
Gross Company Revenue Goal: $146,250.00
Equivalent Markup Multiplier: 25.0% Markup
Pro Trade Tip: A 20% profit margin requires a 25% markup on costs. Margin is profit divided by revenue, whereas markup is profit divided by cost!
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Why Professional Contractors Use This Contractor Markup, Profit Margin & Labor Rate Calculator

On active job sites and service calls, speed and accuracy are everything. Whether you are invoicing clients from your truck, estimating concrete yardage before the ready-mix dispatch cutoff, calculating feeder wire gauges to pass local municipal inspections, or labeling equipment assets to prevent tool loss, our free web tools eliminate guesswork without requiring expensive software subscriptions.

Frequently Asked Questions

Markup is the percentage added to your cost to get your selling price (Markup = (Price - Cost) / Cost). Margin is the percentage of the selling price that is profit (Margin = (Price - Cost) / Price). A 20% margin requires a 25% markup.

Add all annual fixed overhead expenses (van, insurance, phone, software, licensing, tools) and divide by your billable hours per year, then add that to your desired hourly take-home pay.

Most contractors have 25 to 35 billable hours per week out of a 40-hour week. Non-billable time goes to travel, estimating, material runs, and administration.

If an item costs $100 and you want a 30% profit margin, marking it up by 30% gives $130, which is only a 23% margin. To get a true 30% margin, you must divide $100 by 0.70 = $142.86 (a 42.9% markup).
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