Project Margin Calculator · Guide

Project Margin Formula

Project margin connects project revenue with the labor, contractor, direct, overhead, and payment costs used to deliver the work.

Core formulas

Labor cost = Labor hours × Loaded labor cost per hour. Percentage payment fee equals project revenue × fee percentage. Base cost is labor cost + contractor cost + direct costs + allocated overhead + fixed fee. Total project cost is base cost + the percentage fee.

Project profit = Project revenue − Total project cost. When revenue is greater than zero, Project margin % = Project profit ÷ Project revenue × 100.

Break-even revenue

When p is the percentage payment fee expressed as a decimal, Break-even revenue = Base cost ÷ (1 − p). The calculator rounds the threshold upward to the next currency minor unit so the displayed threshold does not round below break-even.

Target-margin revenue

For target margin t, Target-margin revenue = Base cost ÷ (1 − p − t). A finite result requires p + t < 1. If the fee and target together reach 100%, the calculator reports the target as unavailable instead of dividing by zero.

Hourly results

When labor hours are greater than zero, effective revenue per hour equals project revenue ÷ labor hours, and profit per hour equals project profit ÷ labor hours. If labor hours are zero, both hourly results are unavailable.

Estimate versus Actual

Variance is always Actual − Estimate. For revenue, profit, margin, and hourly return, a positive variance is favorable. For hours, costs, break-even revenue, and target-margin revenue, a positive variance is unfavorable.

Rounding method

Entered currency values use the selected currency's minor-unit precision. Labor cost and percentage-fee components are rounded half up to the minor currency unit before costs are summed. Break-even and target-margin revenue are rounded upward to the next minor unit. The calculation engine uses integer and rational arithmetic for authoritative results.

Worked example

With $10,000 revenue, 100 labor hours at $40 loaded cost per hour, $500 contractors, $300 direct costs, $200 allocated overhead, a 3% payment fee, and a $30 fixed fee, total project cost is $5,330. Profit is $4,670 and project margin is 46.70%. Break-even revenue is $5,185.57, and revenue for a 30% target margin is $7,507.47.