How the project margin calculation works
Project cost combines labor cost, contractors, materials and other direct costs, allocated overhead, fixed fees, and the percentage fee applied to project revenue. Percentage fees are revenue-dependent because they increase or decrease with project revenue. Project profit is revenue minus those entered costs, and project margin is project profit divided by revenue. Break-even and target-margin revenue are minimum thresholds, so the calculator rounds them upward to the next currency minor unit.
Estimated versus actual project margin
Use Estimate for the planned project. Turn on Actual when the project is complete or sufficiently known. The variance view uses Actual − Estimate: higher revenue, profit, margin, and hourly returns are favorable; higher hours, costs, break-even revenue, and target-margin revenue are unfavorable.
What to include in project cost
Use labor cost per hour for the internal or loaded cost of time, not the amount billed to a client. Add subcontractors, project-specific materials or services, allocated overhead, and payment or platform fees that belong to this project. Omitting owner labor can overstate the project's economic profitability.
Worked example
A $10,000 estimate with 100 labor hours and the example costs produces $4,670 profit and a 46.70% project margin. The actual example falls to $3,036.50 profit and 31.96% margin because revenue is lower, delivery takes 20 extra labor hours, and contractor and direct costs are higher. The calculator shows the variance but does not infer the business reason for those changes.
How to interpret the results
Negative project profit means the entered project costs exceed revenue. A positive but small margin may leave a thinner buffer, but Mycelgrid does not define a universal healthy margin. Compare project margin with your own target to see whether the target is met or missed. Break-even revenue is the minimum revenue needed to cover the entered base costs after the percentage fee; target-margin revenue is the revenue needed to cover those same costs while preserving your chosen target margin. Effective revenue per hour and profit per hour show the project result relative to the entered labor hours.
Project margin versus markup and gross margin
Project margin measures profit as a share of project revenue. Markup compares profit with cost and is a different ratio. For general selling-price, cost, markup, and gross-margin work, use the Margin Calculator.
Limits and accounting boundary
This is a deterministic before-tax project model, not an accounting ledger. It does not calculate taxes, payroll burden unless you include it in your loaded labor rate, inventory accounting, accruals, depreciation, multi-currency conversion, or legally required financial statements.
Privacy: Your project numbers are calculated in this browser tab. Mycelgrid does not save a calculation history or send the values you enter to accounting, time-tracking, or affiliate partners. Downloads happen only when you choose them.
Related project workflow
Use Time Card Calculator to total worked time, Quote Generator to present approved pricing, and Invoice Generator when work becomes billable.
Frequently asked questions
How do I calculate project profit margin?
Subtract the project costs you choose to include from project revenue to get project profit, then divide project profit by project revenue and multiply by 100. When revenue is zero, project margin is unavailable because the formula would divide by zero.
Should freelancers include the cost of their own time?
Include a consistent labor cost per hour when you want the calculation to reflect the economic cost of your own delivery time. Omitting owner labor can make a project appear more profitable than it is under a cost basis that values that time.
What is the difference between estimated and actual project margin?
Estimated margin uses the revenue, time, and costs planned before or during the project. Actual margin uses the realized values you enter later. Comparing them helps show whether revenue, hours, or delivery costs moved the result.
Why is my target-margin revenue unavailable?
If the payment-fee percentage plus the target margin reaches or exceeds 100%, no finite revenue can both pay that percentage fee and leave the requested margin while also covering positive base costs.
Is my project data uploaded or saved?
No. Project values are calculated in this browser tab and the app creates no calculation history. Download JSON if you want a portable file you can import later.
Read the Project Margin Formula guide.
