What is the difference between gross and net profit?

Gross profit is revenue minus direct project costs (materials, labour, plant, subcontractors). Net profit also deducts overhead allocation (your share of business running costs like van, insurance, admin). Net profit is the true measure of project profitability.

How do I allocate overheads to projects?

Divide your annual overhead costs by the number of projects or billable days. For example, if overheads are £15,000/year and you do 40 projects, allocate £375 per project. Alternatively, use a daily overhead rate (£15,000 / 220 days = £68/day x project days).

What is a good net margin on trade projects?

Net margins of 10-20% are considered healthy for trade businesses. Below 10% leaves little room for error. Above 20% is excellent. Margins vary by trade - specialist work often achieves higher margins than general building.

Why do I need to track project profitability?

Tracking profit per project reveals which types of work are most profitable, helps identify pricing errors, shows where costs are out of control, and builds data for more accurate future estimating. Many tradespeople are surprised which jobs actually make money.

Should I include my own labour in costs?

Yes - your time has value even as a business owner. Include your own labour at your day rate or an imputed salary. This gives a true picture of profitability. A project showing profit that does not account for your time is misleading.

TradeCalculator

Project Profit Calculator

Analyse the true profitability of any construction project

Project Revenue

Materials Cost

Labour Cost

How We Calculate This

Enter the total project revenue (what the customer pays) and all direct costs: materials, labour (including your own time valued at your rate), plant hire, subcontractor invoices, skip/waste disposal, travel, and permits/fees. Deduct an overhead allocation for your business running costs. The calculator shows gross profit (revenue minus direct costs), net profit (after overheads), and margin percentages.

Frequently Asked Questions

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Last updated: March 2026

All calculations are estimates. Verify with your supplier.