Contractor Money Tools

Estimated vs actual job costing

Contractor Job Profit & Costing Calculator

Compare what you expected with what actually happened across revenue, direct job costs, allocated overhead, Job Profit, and Job Margin.

Job values

Enter estimated and actual amounts

Leave unknown values blank. Enter an explicit 0 when the amount is truly zero.

Revenue

Job Revenue

Direct Job Costs

Labor
Materials
Subcontractors
Equipment / Job-Specific Equipment
Other Direct Costs

Need to determine the true productive-hour cost of employee labor first? Use the Labor Burden Calculator.

Allocated Overhead

Allocated Overhead

Need to determine how much company overhead your jobs need to recover? Start with the Contractor Overhead Calculator.

Job analysis

Enter estimated or actual job values to see results.

Use only the values you know. Blank fields remain unknown rather than becoming a completed zero-dollar job.

How to use it

How to use the Job Profit & Costing Calculator

Enter the job revenue and costs you expected, the amounts that actually occurred, or both. The comparison separates directly assigned costs from allocated company overhead so you can see where the job changed.

Estimated vs actual job costing

Compare the plan with the completed job

Estimated values describe the job economics you expected. Actual values describe the final amounts included in this analysis. Their differences show whether revenue, costs, or both changed.

What counts as Direct Job Costs?

Direct Job Costs include labor, materials, subcontractors, job-specific equipment, and other costs assigned directly to the job. Employee labor should use an appropriate productive labor-cost basis; the Labor Burden Calculator can help establish it.

Contribution after direct costs

Contribution is the revenue remaining after directly assigned job costs, before allocated overhead. It is not Job Profit.

How allocated overhead affects job profitability

Allocated Overhead is the company overhead assigned to this job under the business’s chosen method. The Contractor Overhead Calculator helps estimate company overhead and recovery views.

Methodology

How Job Profit is calculated

Direct Job Costs = Labor + Materials + Subcontractors + Equipment + Other Direct Costs

Contribution after direct costs = Revenue − Direct Job Costs

Total Job Cost = Direct Job Costs + Allocated Overhead

Job Profit = Revenue − Total Job Cost

Job Margin = Job Profit ÷ Revenue, when Revenue > 0

Markup on Entered Job Cost = Job Profit ÷ Total Job Cost, when Total Job Cost > 0

Revenue Variance = Actual Revenue − Estimated Revenue

Category Cost Variance = Actual Cost − Estimated Cost

Direct Job Cost Variance = Actual Direct Job Costs − Estimated Direct Job Costs

Contribution Change = Actual Contribution − Estimated Contribution

Total Job Cost Variance = Actual Total Job Cost − Estimated Total Job Cost

Job Profit Variance = Actual Job Profit − Estimated Job Profit

Margin Change = Actual Job Margin − Estimated Job Margin, in percentage points

Job Profit is not necessarily company net profit. Other company-level expenses may not be assigned to this job. Margin cannot be calculated when job revenue is zero.

Job Margin vs Markup

Job Margin divides Job Profit by revenue. Markup on Entered Job Cost divides Job Profit by Total Job Cost. For price-setting analysis, use the Contractor Markup Calculator.

Worked example

A job with more revenue but lower Job Profit

Estimated

Revenue $20,000
Labor $5,000
Materials $4,000
Subcontractors $2,000
Equipment $500
Other Direct Costs $500
Allocated Overhead $2,000

Direct Job Costs $12,000
Contribution $8,000
Total Job Cost $14,000
Job Profit $6,000
Job Margin 30.0%

Actual

Revenue $21,000
Labor $6,000
Materials $4,500
Subcontractors $2,000
Equipment $700
Other Direct Costs $500
Allocated Overhead $2,200

Direct Job Costs $13,700
Contribution $7,300
Total Job Cost $15,900
Job Profit $5,100
Job Margin approximately 24.3%

Variance: Revenue +$1,000; Direct Job Costs +$1,700; Allocated Overhead +$200; Total Job Cost +$1,900; Job Profit -$900; Job Margin Change approximately -5.7 percentage points.

Revenue increased by $1,000, but total job cost increased by $1,900, so actual Job Profit finished $900 below estimate and Job Margin fell from 30.0% to approximately 24.3%.

Review the result

Common reasons a job misses expected profit

How to improve the next estimate

  1. Identify the largest meaningful variance.
  2. Determine whether it came from price, quantity, productivity, or scope.
  3. Update estimating assumptions.
  4. Confirm labor and overhead cost basis.
  5. Reprice future work consistently.

FAQ

Job profit and costing questions

What is job profit?

Job Profit is job revenue minus the direct job costs and allocated overhead entered here. It is not necessarily company net profit.

How do you calculate profit on a construction job?

Subtract Direct Job Costs and Allocated Overhead from Job Revenue.

What is job margin?

Job Margin is Job Profit divided by Job Revenue. It is undefined when revenue is zero.

What is the difference between job margin and markup?

Margin uses revenue as its denominator. Markup uses the entered cost as its denominator.

What costs should be included in job costing?

Include the net labor, materials, subcontractors, job-specific equipment, other direct costs, and allocated overhead assigned to the job.

Why compare estimated and actual job costs?

The comparison shows where revenue or costs changed and helps update future estimating assumptions.

Is Job Profit the same as company net profit?

No. Other company-level expenses may not be assigned to this job.

What if a job loses money?

The calculator shows a Job Loss when entered revenue does not cover Direct Job Costs and Allocated Overhead.