The fastest way for a contractor to go broke while staying busy is to quote jobs on labor and materials alone. Overhead does not disappear because you forgot to include it; it just comes out of profit, one underpriced job at a time, until the books say you are working hard for nothing.
This calculator builds a quote through all four layers a real job carries: direct labor, materials, overhead, and markup, so the price you send actually pays for the business that delivers it.
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Labor hours and loaded labor rate
Enter the labor hours the job requires and the loaded labor rate, which is the fully burdened cost per hour: wages plus payroll taxes, workers' comp, benefits, and other employer-side costs. The single most common job-costing mistake is plugging in the bare wage. A worker you pay $25 an hour might cost the business $32 to $34 once everything is added, and pricing off the $25 quietly erases your margin on every hour billed. If you have not calculated your true loaded rate, multiplying the wage by roughly 1.25 to 1.35 is a reasonable placeholder until you do the real math from your own tax and benefit costs.
Materials and other direct costs
Enter materials consumed on the job plus any other costs specific to it: subcontractor fees, equipment rental, permits, dump fees, and special-order supplies. The defining test is whether the cost would exist if the job did not. These job-specific costs are different in kind from overhead, which keeps accruing whether your trucks roll today or not, and keeping the two straight is what makes the overhead allocation below meaningful.
Overhead
Overhead is the slice of your fixed business costs assigned to this job. The overhead percentage applies that allocation on top of your direct costs. If your books show overhead historically running around 15 percent of job costs, entering 15 spreads that share onto this job. Leave it at zero and the job will look far more profitable than it is, because rent, insurance, the truck, the phone, and the office time all still have to be paid from somewhere, and that somewhere is your quotes.
Markup
Markup sits on top of the fully loaded cost and produces your price and your profit. Enter the markup percentage you want; the calculator applies it after overhead and reports the suggested price along with the gross profit and margin it implies. Note the distinction the result surfaces: markup is a percentage of cost, margin is a percentage of price, and they are never the same number. The right markup depends on your trade, your local market, and how differentiated your work is.
- Quoting off the bare wage instead of the loaded labor rate.
- Setting overhead to zero and mistaking it for profit.
- Confusing markup with margin and ending up below target.
- Leaving permits, dump fees, or rental out of direct costs.
How to use this calculator
Enter your labor hours and loaded rate, materials and other direct costs, an overhead percentage, and your desired markup. The result shows total job cost, the suggested price, and the expected gross profit. Slide the markup up or down to test pricing scenarios before you commit a number to the customer. Everything is calculated in your browser; nothing you enter is uploaded or stored.
Frequently asked questions
What is the difference between markup and margin?
Markup is the percentage added to cost to reach the price; margin is profit as a percentage of that price. A 30 percent markup on a $100 cost yields a $130 price and a margin of about 23 percent, not 30. If a job needs to hit a specific margin, the markup required to get there is always higher than the margin number, so know which one a target refers to before you quote.
How do I figure out my overhead rate?
Divide your total overhead for a period by your total direct costs (or total revenue) for the same period, then multiply by 100. Overhead typically includes rent, utilities, insurance, office and admin salaries, vehicles, and equipment not tied to a single job. Separating direct costs from operating costs on your profit-and-loss statement is the cleanest way to land on a consistent rate.
What if the suggested price is too high for my market?
Then the honest options are to cut direct costs, work more efficiently so the job takes fewer hours, reduce overhead, accept a slimmer markup, or walk away. Winning a job below full cost is not a win; it funds your competitor's customer with your money. The value of running the numbers first is seeing a marginal job clearly before you are committed to it.
Important
This tool provides estimates and general-purpose documents, not financial, tax, legal, or professional advice. Verify important results before relying on them.
Support
Problem with this tool or suggestions for improvement? Please email support@niftyutilities.com.