How many guys were on the job. Count yourself if you were swinging a hammer, not just running the company. A part-timer can be 0.5.
Job hours for each man on the crew. A two-week job at 40 hours a week is 80. If the crew varied day to day, use total man-hours divided by crew size.
What an hour of labor really costs you — wage plus taxes, comp, insurance, and time off. Not what you bill, and not the bare wage. Don’t know it? Open the burden helper below and it’ll build it for you. The $49 default is just the demo math — replace it with yours.
Everything from the supply house and the yard that went into this job — receipts, not memory. Include the odds and ends that came off the van; they’re job cost too.
What you actually paid subs on this job, off their invoices — not the budget number you carried in the estimate.
Rentals, fuel, dump fees, permits, the porta-john — direct job costs that aren’t labor, materials, or subs.
The job’s share of the shop, office, trucks, and insurance. Find yours: a year of overhead spending divided by that year’s direct job costs. If you’ve never done that math, 12 is a starting point, not your number.
What the customer pays for the job — original contract plus signed change orders. Verbal extras you never billed don’t count, which is its own problem.
Total job cost
$42,986
Gross profit
$9,014
Gross margin
17.3%
Markup equivalent
21.0%
Break-even price
$42,986
Anything below this number is a loss.
Where the money went
How to Cost a Job
Job costing is simple arithmetic that most guys never sit down and do. Add up the direct costs — labor at its loaded rate, materials, subs, equipment — then add the job’s share of overhead. That total is what the job cost you. Set it next to the contract price and you have the answer in dollars: profit or loss, no guessing.
The order matters. Labor first, because it’s the cost most likely to blow through the estimate. Materials and subs next — receipts and invoices, not memory. Then overhead, because the shop, the trucks, and the insurance were burning money the whole time your crew was on site. Skip the overhead line and a job can look profitable on paper while the company goes backward. You have to know your numbers — running every finished job through this math is how you get dialed in on what it costs you to work.
Loaded Labor Cost
The number that sinks more job costs than any other is labor priced at the wage. The wage is what your guy sees on his check. What he costs you rides on top of it: payroll taxes, workers comp, liability insurance, paid time off, the truck he drives, the small tools he burns through. That stack is labor burden, and if you cost jobs at the bare wage, every labor hour in the estimate is quietly under water before the first nail goes in.
Use the burden helper in the calculator: enter the base wage and your burden percentage and it builds the loaded rate for you. If you’ve never worked out your burden, sit down with your bookkeeper and pull last year’s numbers — total labor-related spending divided by wages paid. Whatever the answer is, it’s yours, and it belongs in every estimate from now on.
$35 base wage
$49 loaded rate
Burden layer: payroll taxes, workers comp, liability insurance, paid time off — every dollar past the base wage that the job actually costs you.
Margin vs. Markup
Margin and markup are different numbers, and mixing them up costs real money. Margin is profit divided by the PRICE. Markup is profit divided by the COST. Mark a $40,000 job up 20% and you sell it at $48,000 — but your margin is $8,000 / $48,000 = 16.7%, not 20%. If you needed 20 points of margin to cover the shop, you just came up short on every job you priced that way, and nothing on the invoice will tell you.
To hit a target margin, don’t add the percentage — divide by what’s left. Price = cost / (1 - margin). A 20% margin on $40,000 of cost is $40,000 / 0.80 = $50,000, which is a 25% markup. The general rule: markup = margin / (1 - margin), so a 10% margin needs an 11.1% markup. At thin margins the gap looks like rounding; that gap is the difference between a profitable year and working for lunch money. Run your numbers both ways until the difference is second nature.
Working the other direction — price from a cost and a target margin — with the construction profit margin calculator, or the contractor markup calculator.
Margin — profit ÷ price
16.7%
Markup — profit ÷ cost
20.0%
Same $8,000 of profit — the bar segments are identical. Only the percent changes, because the denominator does.
Margin to markup
This calculator is a snapshot. Your jobs are moving.
Plenty of contractors have lost money on a job — the expensive part is not finding out until it’s over. Mid-job, it’s easy to lose track of what a job is actually costing you, especially if you’re doing this with multiple spreadsheets and a folder of receipts. SiteOps keeps these same numbers running on every job: labor lands from GPS-verified clock-ins, change orders and receipts hit the job as they happen, and the margin updates while you can still protect it.
Not ready to sign up? See how SiteOps job costing works.
What Overhead Really Costs
Plenty of contractors have no clue what their true overhead costs are — and that’s usually where the profit went. Overhead is everything you pay to exist as a company that no single job invoices for: the shop, office help, estimating time, software, insurance policies, truck payments, the phone bill. Every job has to carry a piece of it, or your jobs “make money” while the company loses it. Being busy and being profitable are two different things, and overhead is the gap between them.
The straightforward method: take a year of overhead spending, divide it by the same year’s direct job costs, and that’s the percentage to load onto every job. If overhead ran $120,000 against $1,000,000 of direct costs, that’s 12% — so a $38,000-cost job carries $4,560 of overhead. Put that line on every estimate and every job cost, and you’ll stop standing in the office in January asking where did the money go.
Pouring concrete? The concrete bid calculator runs the other direction: yards, crew hours, pump, and overhead in, a bid price and a per-square-foot check out.
Overhead loading
12%
$120,000 ÷ $1,000,000 = 12% overhead loading — hypothetical example, not your number.
Estimate vs. Actual
The calculator above tells you what a job actually cost — but only if you feed it actuals. That’s the hard part. Hours get logged from whatever the foreman remembers on Friday. Receipts sit on the dash of the truck. The material they take from the van never hits a job file. Garbage in: garbage out — cost a job from guesses and all you’ve done is dress the guess up in decimal points.
The discipline that fixes it is boring: every hour tagged to a job, every receipt tagged to a job, and a look at estimates vs actuals while the job is still running. Skip that check and you’re losing money and not knowing it until much later. If the crew burns 16 hours more than you estimated, you lost real money, and next month’s bid needs to know it. Whether you run the shoe box method of bookkeeping, a spreadsheet, or software, the rule doesn’t change: track the actuals or you’re pricing the next job off the last guess. If your crews clock in by phone, tagging hours to jobs is the natural place to start — here’s how GPS-verified time tracking handles it.
Labor variance
+$784
Demo numbers, from this page’s own default example — not measured data. Labor overran by the crew’s extra 16 hours; materials landed on budget.
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Frequently asked questions
- How do you calculate job costs in construction?
- Add the direct costs — labor at its loaded hourly rate (wage plus burden), materials, subcontractors, and equipment — then add the job’s share of company overhead. Direct costs plus allocated overhead is your total job cost. Subtract that from the contract price for gross profit, and divide profit by price for your margin. This construction job cost calculator adds it up for you, instantly.
- How do I know if I made money on a construction job?
- Compare the contract price — including signed change orders — against what the job actually cost: real hours at loaded rates, real receipts, real sub invoices, plus overhead. If you’re comparing against the estimate instead of actuals, you’re not measuring, you’re guessing. Job costing exists so you know, instead of guessing.
- What’s the difference between margin and markup?
- Margin is profit divided by the price; markup is profit divided by the cost. A 20% markup on $40,000 of cost gives a $48,000 price but only a 16.7% margin. To convert: markup = margin / (1 - margin) — so a 10% margin requires an 11.1% markup, and a 20% margin requires a 25% markup.
- What is a good profit margin on a construction job?
- There’s no universal number, and anybody quoting one is describing their business, not yours. The right margin is the one that covers your true overhead and pays the company a profit, not just a paycheck for you. Build it from your own books — annual overhead, what the company needs to earn, what your market allows — then price to it with cost / (1 - margin).
- What is labor burden and what does it include?
- Labor burden is everything an hour of labor costs beyond the wage: payroll taxes, workers comp, liability insurance, benefits, paid time off, and the vehicles and gear that go with the man. Loaded hourly cost = wage x (1 + burden %). Cost jobs at the loaded rate — the bare wage always understates what the hour costs you.
- How much overhead should I add to each job?
- Divide a year of overhead spending by the same year’s total direct job costs — that percentage is what every job has to carry. If overhead was $120,000 against $1,000,000 of direct costs, load 12% onto every estimate and every job cost. There’s no industry-standard number; it comes out of your books, nobody else’s.
The numbers on this page are general information for education and planning, based only on what you enter. They aren’t accounting, tax, or legal advice, and they don’t replace your books. Burden rates, overhead percentages, and margins vary by company, trade, and state — confirm your real numbers with your accountant or bookkeeper before making pricing or financial decisions for your business.
Know what the job made — before it’s over.
This page tells you what one job made, after the fact. SiteOps tracks labor from GPS-verified clock-ins, change orders, and receipts against every job as they happen — so when the job closes, you know. You don’t guess. Priced by crew size, not per seat — $79/mo for a 10-man crew.