Construction Profit Margin Calculator

What Is Construction Profit Margin?

Profit margin is the percentage of revenue that becomes profit after all costs are paid. It's calculated as: (Revenue − Cost) ÷ Revenue × 100. A 25% margin on a $20,000 job means you made $5,000 in profit.

What's a Healthy Profit Margin for Construction?

Gross margin benchmarks by segment:

• Specialty trades (electrical, plumbing, HVAC): 15–25% gross margin
• General contractors managing subs: 8–15% gross margin (lower because subs do more of the work)
• Remodeling contractors: 20–35% gross margin

These are gross margins — before your own salary and company overhead. Net margin (what you actually take home) is typically 5–15% of revenue for a well-run small construction company.

Why Most Contractors Don't Know Their Real Margin

Most contractors know how much they charged. Few know what a job actually cost — especially when it comes to their own labor, small incidental purchases, and overhead. A $15,000 job that "cost $10,000 in materials" might have actually cost $12,500 once labor and overhead are counted. That changes a 33% margin to 17%.

The only way to know your real margin is real-time job costing that captures every expense as it happens. Hardhat Ledger does this automatically — scan receipts, log hours, and see your true margin on every active job.