Service Pricing & Profit Margin Calculator
Calculate what a service actually costs your company and estimate the price needed to reach your target profit margin.
Estimated Price to Target Your Margin
Target margin must be below 100% to calculate a price.
Margin Is Not the Same as Markup
25% Markup on a $500 job
Price: $625 - Profit: $125
Actual Margin: 20%
True 25% Margin on a $500 job
Price: $666.67 - Profit: $166.67
Margin: 25%
This is why simply adding your desired percentage to your cost can result in a lower margin than expected.
This calculator provides estimates based on the information entered. Cost classification, overhead allocation, pricing requirements, taxes, and appropriate profit targets vary by company. Consider reviewing important pricing decisions with a qualified accounting or financial professional.
Job Cost & Pricing Calculator
Enter your job details below. Results update automatically.
Employees
Hours Each
Hourly Cost
Enter what the employee costs your company per hour, not what you charge the customer.
Overhead is the cost of running your company that is not tied directly to one specific job, such as insurance, software, office expenses, rent, administrative payroll, vehicles, and other operating expenses.
A simple way to estimate overhead per job is to divide your average monthly business overhead by the number of jobs you typically complete each month.
Example
A Price Should Account for More Than Materials and Labor
A job can appear profitable while still failing to contribute enough toward the costs of running the company. Looking at direct job costs, business overhead, and your target margin together can provide a more complete view of your pricing.
Building Your Fully Loaded Cost
Reaching Your Selling Price
Not Every Business Expense Works the Same Way
Fixed Costs
Expenses that generally do not change directly with the number of jobs completed, such as rent, certain salaries, insurance, or software subscriptions.
Variable Costs
Expenses that generally increase or decrease as work is completed, such as job materials or certain job specific expenses.
Mixed Costs
Some expenses can contain both fixed and variable portions. Separating these costs can make pricing estimates more useful.
Better Pricing Starts With Better Visibility
Understanding job costs is one part of building stronger operations. GoOpto helps companies connect customer information, estimates, invoices, payments, jobs, communication, and other operational activity within a more connected environment.
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