Calculator
Project Profitability Calculator
Project profit is revenue minus what it costs you to deliver. Enter the billable revenue, the labor cost (hours times cost rate, or one total figure) and any other expenses. You get the profit and the margin.
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Project margin
Answers
Frequently asked questions
Common queries and answers about the project profitability calculator.
- What is a healthy project margin?
- Service businesses often aim for 20 to 40% net margin on a project. Below 15% leaves little room for error. If it keeps coming out negative, the scope or the rate has to change.
- Cost rate vs billable rate?
- Cost rate is what a person costs you per hour, so salary plus overheads. Billable rate is what you charge the client. Your profit lives in the gap between the two.
- Should I include overheads?
- For a quick read, use a loaded cost rate that already has overheads baked in. For a precise number, track cost rates and expenses per project in a tool like TimeTracker.
- Why does the calculator ask for decimal hours?
- Decimal hours are what payroll and invoices use. 7 hours 30 minutes is 7.50 hours. Multiply that by the cost rate and the labor cost is right the first time.
Tired of doing this by hand?
TimeTracker captures every hour automatically and turns it into timesheets, invoices, and live profitability.