Overhead and Profit on a $500,000 Job
Price the job at
$666,666.67
15% overhead and 10% profit, both taken out of the price rather than added to the cost.
How that number is worked out
These are the figures this page was built with and every line the calculator produces from them. Change anything above and all of it moves.
- Direct job cost: material, labor, subs, equipment500000 $
- Overhead recovery15 %
- Profit you want to keep10 %
Price the job at$666,666.67
| Direct job cost | $500,000.00 |
|---|---|
| Overhead recovered at 15% | $100,000.00 |
| Profit at 10% | $66,666.67 |
| Price | $666,666.67 |
| Markup this equals | 33.3% |
| If you had added the percent to cost instead | $625,000.00short by $41,666.67 |
Overhead rate compared
Profit is held at 10 percent and only the overhead rate moves, so the last column shows what the wrong method would have charged at each level.
| Overhead rate | Price the job at | Markup this equals | If you had added the percent to cost instead |
|---|---|---|---|
| 10% | $625,000.00 | 25% | $600,000.00 |
| 15% | $666,666.67 | 33.3% | $625,000.00 |
| 20% | $714,285.71 | 42.9% | $650,000.00 |
| 25% | $769,230.77 | 53.8% | $675,000.00 |
What else matters here
Half a million of direct cost prices at $666,666.67 at 15 percent overhead and 10 percent profit, recovering $100,000 of overhead and earning $66,666.67 of profit.
What this calculator assumes
- The classic 10 and 10 is overhead 10 percent and profit 10 percent. Almost nobody's overhead is actually 10 percent, so work out your own: last year's overhead divided by last year's revenue.
- Both numbers here are treated as margins, taken out of the price, not markups added to cost. That is the conservative reading and it is the one that leaves you whole.
- The wrong way, adding 25 percent to cost and calling it 25 percent O and P, leaves you 5 percentage points short on a $24,000 job. The comparison is below.
Questions people ask
What should I charge for a job that costs me $500,000?
$666,666.67 at 15 percent overhead and 10 percent profit.
Should subcontracted work carry the same markup as my own work?
Applying nothing to sub work means the sub's portion of the job pays for none of the office.
How do I work out my real overhead percentage?
Last year's overhead divided by last year's revenue. Overhead is everything that is not job cost: insurance, the truck, the phone, software, the accountant, advertising, your office time. For most small contractors it lands between 12 and 25 percent.
The overhead and profit calculator takes any dimensions you like and hands back the same list.
Other common sizes
14 more sizes are answered on the overhead and profit calculator page