How profit margin works
Profit margin is the share of the price you keep after every cost of the job:
Margin = (Price − Labor − Supplies − Travel − Overhead) ÷ Price
Labor is usually the biggest cost. Use what an hour of labor really costs you, including payroll taxes and workers' comp, not just the wage.
Pricing backwards from a target
If you know the margin you want, the calculator works backwards: price = direct costs ÷ (1 − overhead % − target margin %). Use this before quoting large or unusual jobs.
Frequently asked questions
What's a good profit margin for a cleaning business?
It depends on your model and market. Track your own margin by job type, and raise prices on the job types that fall below your target.
Is overhead part of the job cost?
Yes. Insurance, software, marketing and your vehicle all have to be paid from job revenue. Spreading them as a percentage of price is a simple way to include them.