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Calculate net profit margins and analyze project profitability. Perfect for contractors and construction businesses tracking financial performance.
Calculator inputs
Enter measured project values. Results update only when you choose Calculate.
Method
Construction is the only industry where a 35 percent gross profit can become a 1 percent net loss without anyone noticing until tax season. Overhead, callbacks, financing carry, and the unbilled change order that quietly aged out — they all eat the gap. CFMA Annual Construction Industry survey data puts median GC net margin at 2 to 4 percent and specialty subs at 4 to 8 percent. Anything above that range is a real outlier; anything below is most of the industry.
Run net profit at three levels: by job at closeout, by month against the trailing twelve, and by year against budget. The job-level review catches estimating errors. The monthly catches overhead drift. The annual catches whether the business model still works.
For percentage-of-completion accounting, use revenue earned in the period — billed amount adjusted for under or over-billing. Cash-basis numbers will mislead anything longer than a single one-shot job.
Materials, loaded labor (with burden), equipment, subs, permits, bonds, freight, dump fees, project-specific insurance. If it would not exist without this job, it is direct.
Office salaries, rent, software, fleet, owner draw, sales — divided across direct labor hours or revenue, depending on which driver matches your G&A pattern. Most contractors land between 8 and 18 percent of revenue.
A 6 percent net on a $5M year is $300K. A 6 percent net on a $500K year is $30K. The percent is the same; the runway, the salary the owner can pay themselves, and the hiring capacity are not.
Per CFMA Annual Construction Industry survey data, GC net margins typically run 2 to 4 percent, specialty subs 4 to 8 percent, residential remodelers 6 to 12 percent. Anything north of those ranges either has a unique market position or is being measured wrong (typically by leaving owner comp out of overhead).
Profit is accrual; cash is what cleared the bank. Net 30 contracts on a labor-heavy job mean you carry payroll and material for 4 to 6 weeks before a draw lands. A profitable backlog can still strangle cash if AR grows faster than billed-and-collected revenue.
Three places, in order of frequency: labor productivity (jobs that take 15 to 30 percent more crew-hours than estimated), under-priced change orders, and overhead allocation (the office burn that growth was supposed to cover but did not).
Yes. If you do not pay yourself a market salary on the P&L, your "net profit" is overstated by exactly that amount. CFMA benchmarks assume owner comp is in overhead — leaving it out makes your numbers look better than peers.
Separate plan workflow
This calculator solves one bounded formula from the inputs shown. BuildVision AI supports reviewed plan takeoff, complete-document CSV, and editable quote lines; the estimator owns pricing and final bid approval.