Plenty of builders win the job, finish the job, and still lose money on the job — they just don’t find out until BAS time. Price the project properly before you sign: direct costs, on-costs, overhead recovery, retention and contingency, all in one view.
Enter the contract value and your cost estimates below. The calculator shows gross margin, true net margin after overhead allocation, the breakeven contract price, and how much of your profit is parked in retention — the four numbers that decide whether a project is worth doing.
Construction Project Profit Calculator
Gross margin, net margin, breakeven and retention — before you sign the contract.
1Project revenue
2Direct costs
3Business settings
Three steps to the real number
Revenue, honestly
Contract price plus signed variations only — hoped-for variations are not revenue. Set the retention percentage so the calculator can show how much profit is locked up and for how long.
Costs, fully loaded
Materials, labour with on-costs (the 30% most builders forget), subbies, plant, prelims. Then contingency on top — because the project that comes in exactly on estimate hasn’t been built yet.
Margin, after overhead
Gross profit is not your profit. The office, the ute, the insurance, and your own time have to be recovered from every job. The calculator nets off an overhead allocation and shows the margin that’s actually yours.
What healthy margins look like in construction
Indicative ranges from industry benchmarking and Trinity client experience — your trade, region and contract type shift these materially.
| Business type | Gross margin (healthy) | Net margin (healthy) | Watch out for |
|---|---|---|---|
| Residential builder (new builds) | 18–25% | 5–8% | Fixed-price contracts in a rising materials market; prime cost item disputes |
| Renovations and extensions | 20–30% | 6–10% | Latent conditions — what’s behind the wall; scope creep without signed variations |
| Trade contractor (electrical, plumbing, carpentry) | 30–50% | 8–15% | Underquoted labour hours; unbilled call-backs; charge-out rates that lag wage rises |
| Commercial subcontract | 15–22% | 3–7% | Retention and payment terms; liquidated damages; head contractor insolvency |
Markup is not margin: a 25% markup on cost is only a 20% margin on price. Quoting “25% margin” but calculating markup is one of the most common ways builders underprice.
Where project profit really leaks
What should I include in the labour on-cost percentage?
Superannuation (12%), annual and personal leave plus public holidays (around 12–14% for employees), workers compensation (varies sharply by trade — tower scaffolding is not office admin), payroll tax if you’re over the NSW threshold, and long service leave levies. For most building employers the honest total lands between 25% and 35% on top of the wage. If you only load super, every quote underprices labour by a fifth.
How do I work out my overhead allocation percentage?
Take last year’s total overheads — rent, office wages, your own salary, vehicles, insurance, software, marketing, accounting — and divide by last year’s revenue. That percentage is what every job must recover before it makes a cent of true profit. Most small builders land between 8% and 15%. If you’ve never done this calculation, that’s the single most valuable hour you’ll spend on your numbers this year.
Should I price GST in or out?
Work ex-GST everywhere in costing. GST on your sales is collected for the ATO, and GST on your costs comes back as credits — it is not revenue and not cost. The trap is mixing: an inc-GST subbie quote against an ex-GST contract price silently distorts the margin by 10%. This calculator assumes everything is ex GST.
How should I think about retention?
As profit you’ve earned but cannot spend. A typical 5% retention often exceeds the entire net margin on a thin job — meaning you finish the build cash-negative and wait up to a year for your profit. Diarise both release claims (practical completion and end of defects period); unclaimed retention is one of the most common write-offs we see in builder accounts. On NSW projects over $20m, retention must be held in trust.
What about progress claims and cash flow during the job?
Profit and cash are different questions. A profitable job can still send you broke if your progress claims lag your spend — you are effectively financing the client. Front-load claims where the contract allows, invoice variations the week they’re approved (not at the end), and use your Security of Payment Act rights on late payers. Trinity builds claim-versus-cost curves for clients on bigger projects.
The market is tight. Should I take a job at breakeven to keep the crew busy?
Sometimes — but do it knowingly. A breakeven job that covers your fixed overhead and keeps a good crew together can beat standing them down. The danger is the habit: if every job is priced “to stay busy”, you’ve built a business that works hard to make nothing, and one bad job tips it over. Decide a floor margin, in writing, before quote season — not in the heat of a tender.
Is my data sent anywhere?
No — every number stays in your browser. Nothing is logged or transmitted. Close the tab and it is gone. Your costing and your margins are commercially sensitive; we built it accordingly.
Know which jobs make you money — every month, not once a year
Trinity Accounting Practice runs Virtual CFO for builders and trade contractors: job-level profitability in Xero, quote reviews before you commit, BAS, payroll and the tax planning that goes with lumpy construction income. Established 2003.
Book a free 15-min chat See the Virtual CFO service
Ramy Hanna · Principal, Trinity Accounting Practice · Registered Tax Agent · Fellow IPA, TIA, NTAA · Certified Xero Advisor
Estimates are general guidance for project pricing — actual results depend on contract terms, site conditions and execution. Not a substitute for a quantity surveyor or detailed estimating.
159 Stoney Creek Road, Beverly Hills NSW 2209 · Established 2003
