Job Profit Margin Calculator
Calculate gross profit, net profit, and markup percentage for any job. Understand the difference between markup and margin, and know if you're actually making money. Free for UK trades.
Job Details
What you charge the customer
Materials + labour + subcontractors
Allocated portion of rent, insurance, marketing
Your Profit Margins
Gross Profit
Revenue minus direct costs
£600.00
40.0% margin
Net Profit
After overhead allocation
£400.00
26.7% margin
Markup Percentage
Profit relative to costs
66.7%
Revenue Breakdown
📊 Margin vs Markup
Margin: Profit as % of selling price
Markup: Profit as % of costs
🎯 Industry Benchmarks
Gross margin: 25-40% is typical
Net margin: 10-20% is healthy
⚠️ Important Disclaimer
This guide is for general informational and educational purposes only. It does not constitute professional advice of any kind (legal, financial, tax, insurance, or otherwise).
Before making business decisions: Consult with qualified professionals (solicitors, accountants, insurance brokers, etc.) who can assess your specific circumstances. Laws, regulations, and industry standards change frequently and vary by location and situation.
Toolfy and the article authors accept no liability for decisions made or actions taken based on information provided in this guide. You are solely responsible for ensuring compliance with all applicable laws and regulations.
Understanding Profit Margins vs Markup
Most trades confuse markup and profit margin. They sound similar but give very different numbers. Using markup when you mean margin (or vice versa) can destroy your profitability without you realizing it.
⚠️ Critical Difference
Markup is calculated on your COSTS: (Price - Cost) ÷ Cost × 100%
Margin is calculated on your PRICE: (Price - Cost) ÷ Price × 100%
A 50% markup = 33% margin. A 100% markup = 50% margin. They're not interchangeable.
Real Example: The £1,000 Bathroom Job
Job Details:
- • Materials: £400
- • Labour (8 hours × £40/hour): £320
- • Total Direct Costs: £720
You quote the customer:
£1,000
Your Calculations:
- • Gross Profit: £1,000 - £720 = £280
- • Gross Margin: £280 ÷ £1,000 = 28%
- • Markup: £280 ÷ £720 = 38.9%
Same job, but 28% margin ≠ 38.9% markup. Always know which one you're calculating.
What Is Gross Profit vs Net Profit?
Gross Profit (Job-Level)
Revenue minus direct costs (materials and labour for this specific job).
Formula: Selling Price - (Materials + Labour) = Gross Profit
Net Profit (Business-Level)
Gross profit minus overhead costs (van, insurance, marketing, admin time, etc.).
Formula: Gross Profit - Overhead Costs = Net Profit
Key insight: You can have 30% gross margin on every job but still lose money if your overhead costs are too high. Track both.
Target Profit Margins for UK Trades
| Trade | Target Gross Margin | Target Net Margin |
|---|---|---|
| Plumber | 30-40% | 10-15% |
| Electrician | 35-45% | 15-20% |
| HVAC/Gas Engineer | 35-50% | 15-25% |
| Carpenter | 25-35% | 8-12% |
| Decorator/Painter | 25-35% | 10-15% |
Source: UK trade business benchmarks 2025. Actual margins vary by region, experience, and business model.
How to Use This Calculator
- Enter your selling price - What you quoted the customer
- Add direct costs - Materials + labour for this specific job
- Optionally add overhead allocation - Your share of business costs for this job
- See gross profit, net profit, margin, and markup - Instantly
💡 Overhead Allocation Explained
If your annual overhead is £12,000 and you do 100 jobs/year, allocate £120 overhead per job. This shows your true net profit per job, not just gross profit. Many trades ignore this and wonder why they have no money at year-end despite "profitable" jobs.
Common Profit Margin Mistakes
❌ Mistake: Confusing markup with margin
"I use 30% markup" could mean 30% margin (price = costs ÷ 0.7) or 30% markup (price = costs × 1.3). That's a 16% difference in your price. Be precise or you'll undercharge.
❌ Mistake: Forgetting to include labour as a cost
Your time is a cost, even if you're the owner. If you work 8 hours on a job, that's 8 hours you can't work elsewhere. Include it at your hourly rate or you'll think you're profitable when you're not.
❌ Mistake: Only tracking gross profit
"I made £300 profit on that job!" But after van costs, insurance, marketing, and admin time, you actually made £80. Track net profit or you'll run out of money.
❌ Mistake: Accepting jobs below your target margin
"It's better than nothing" is how trades go bust. Every below-margin job takes time away from profitable work. Set a minimum margin (e.g., 25%) and stick to it.
Markup to Margin Conversion Chart
| If You Use This Markup | Your Actual Margin Is | Example: £100 Cost |
|---|---|---|
| 25% markup | 20% margin | Sell for £125 → £25 profit |
| 33% markup | 25% margin | Sell for £133 → £33 profit |
| 50% markup | 33% margin | Sell for £150 → £50 profit |
| 100% markup | 50% margin | Sell for £200 → £100 profit |
| 150% markup | 60% margin | Sell for £250 → £150 profit |
Use Margins to Drive Decisions
Use this calculator on a few recent jobs to see where you're making money and where you're not. Then adjust pricing, scope, or discounting so more work lands in the healthy zone.
Try Toolfy Free →Related Resources
- Markup vs Margin: Pricing Guide for Trade Businesses 2026 - Deep dive into the difference and when to use each
- Profit Margin Benchmarks for Trade Businesses 2026 - Industry-specific profit targets
- Hourly Rate Calculator - Calculate what to charge per hour to hit profit targets
- Service Business Pricing Mastery 2026 - Complete guide to pricing strategy
Frequently Asked Questions
What's a good profit margin for trades?
Target 30-40% gross margin minimum for most trades. Net margin should be 10-20% after overhead. Below 25% gross margin, you're working for nothing once overhead is factored in.
Should I use markup or margin for pricing?
Use margin when setting targets ("I want 30% profit margin") because it's based on your selling price. Use markup for quick calculations ("materials cost £100, I'll add 50% markup"). Just know how to convert between them.
What if my margins are lower than benchmarks?
Either raise prices, reduce costs, or increase efficiency. If you can't hit 25% gross margin minimum, you'll struggle to stay in business. Don't compete on price - compete on value, speed, or reliability instead.
How do I calculate overhead allocation per job?
Add up annual overhead (van, insurance, marketing, etc.), divide by expected number of jobs. Example: £15,000 overhead ÷ 120 jobs = £125 overhead per job. More accurate: allocate by hours (£15,000 ÷ 1,500 billable hours = £10/hour overhead).
Use Profit Margins as a Scoreboard
Take a sample of recent jobs, run the numbers, and decide where you need higher prices or tighter scope so more work lands in your target margin range.