Contractor Break-Even Calculator: The Lowest Price a Job Can Take
A job's break-even price is its direct costs plus the share of overhead it has to carry: (labor + materials) × (1 + overhead %). Price above it and the job contributes profit; price below it and you pay to work. Enter the price you plan to charge and the calculator shows the profit or loss, the margin, and how much cushion sits between your price and the floor.
The floor is where to start a negotiation, not where to quote. To set the price from a target margin, use the contractor profit calculator; to see what the markup you add really leaves, the markup calculator.
Job Cost Inputs
Wages, labor burden, and subcontractor costs for this job
All materials, supplies, and equipment rental for this job
Use your actual allocated insurance, vehicle, tool, office, and other overhead
Your proposed price to the customer; see if it clears break-even
Break-Even Analysis
How the calculator finds the floor
Six lines. The overhead percentage is applied to direct costs, which matters for what you enter; see the conversion table below.
- 1.
Direct costs
labor + materials
- 2.
Overhead share of this job
direct costs × overhead %
- 3.
Break-even price (the headline number)
direct costs + overhead share
- 4.
Profit or loss at your price
planned price − break-even price
- 5.
Margin at your price
profit ÷ planned price
- 6.
Cushion
(planned price − break-even price) ÷ break-even price
Margin and cushion are different numbers on purpose: margin is the profit as a share of what the customer pays, cushion is the profit as a share of what the job costs you. The status label (Thin Margin, Healthy Profit, Strong Profit) is a fixed cut at 15% and 25% margin, not a benchmark for your trade.
Worked example: a $6,500 job with a $5,750 floor
Illustrative inputs, the same as the calculator's prefilled values: $3,000 of labor, $2,000 of materials, 15% overhead, and a price of $6,500 that the customer is now asking you to trim.
- Direct costs
- $3,000 labor + $2,000 materials = $5,000
- Overhead share at 15%
- $750
- Break-even price
- $5,750
- Planned price
- $6,500
- Profit
- $750
- Margin at that price
- $750 ÷ $6,500 = 11.5%
- Cushion above the floor
- $750 ÷ $5,750 = 13.0%
- After a $600 surprise (second trip, extra material run)
- $150 profit, 2.3% margin
The customer asks for $500 off. At $6,000 the job still clears the floor by $250, which sounds fine until the second trip. The question to ask before saying yes is not "is $6,000 above break-even" but "is the cushion bigger than a normal surprise on this kind of job." Here it is not; the table below is what to do instead.
When the customer pushes back on price
Where the number they want lands relative to the floor, and what that leaves you to do.
| Where the ask lands | What it means | What to do |
|---|---|---|
| Above the floor, and the cushion covers the profit you planned | The negotiation is about profit, not survival | Offer a smaller scope or a later start before a lower price. A discount comes straight out of profit. |
| Above the floor, but the cushion is thinner than a normal surprise on this kind of job | One extra trip or material run turns the job to zero | Hold the price. Remove items instead, and put a change-order line in the estimate for anything found behind the wall. |
| At the floor | Nothing for you; overhead is covered only if the estimate holds exactly | Only for a reason you can name (a gap in the schedule, a customer who sends work), only once, and never as the new normal. |
| Below the floor | You pay to do the job | Decline, or re-scope so the direct costs drop below the price. Do not make it up on the next one; the next one has its own floor. |
Overhead as a share of revenue is not the number to enter
Most contractors know overhead as a share of sales. This calculator applies it to direct costs. At break-even the conversion is share of revenue ÷ (1 − share of revenue); once you add profit on top, overhead becomes a smaller share of the price, so the table is the honest floor-level conversion.
| Overhead as a share of revenue | Enter this (share of direct costs) |
|---|---|
| 10% | 11.1% |
| 15% | 17.6% |
| 20% | 25.0% |
| 25% | 33.3% |
| 30% | 42.9% |
Your own percentage: last twelve months of indirect costs divided by last twelve months of direct job costs. For one reference group, NAHB reports residential remodelers averaged a 29.9% gross margin and a 6.3% net margin in 2024 (NAHB, Home Remodeling Profit Margins, posted April 10, 2026; checked October 7, 2026). Derived from those two figures and not reported by NAHB: operating expenses of about 23.6% of revenue, which is roughly 33.7% of their direct costs. That describes remodeling firms in that survey, not a target for a one-truck business, whose overhead share is usually different.
Costs that quietly raise the floor
Each of these is real money that is in neither cost line until you put it there, in labor, in materials or in the overhead percentage.
Drive time and fuel
If you track by mileage, the IRS business rate is 72.5 cents a mile for January 1 to June 30, 2026 and 76 cents from July 1, 2026. Two 30-mile round trips at 76 cents is $45.60 that is in neither cost line unless you put it there.
The estimate visit, for every job you did not win
Paid for by the jobs you did win. It belongs in overhead, which is why the overhead percentage is not optional.
Callbacks and warranty work
A second visit on an old job costs labor and fuel and bills nothing. Your own history of callbacks is the only honest rate.
Consumables, disposal, permits, card fees
Blades, fasteners, caulk, the dump run and the processing fee on a card payment are small each time and are in no line unless you add them.
Mileage rates: IRS standard mileage rates, checked October 7, 2026. The rate is a tax deduction figure, used here as a reasonable proxy for what a mile costs to drive.
If your labor line is hours times a rate, make sure the rate itself already carries what it should: the hourly rate calculator builds it from your income goal and expenses, and the service pricing calculator prices a service call from hours, rate, materials, overhead and margin in one pass.
Questions about break-even on a job
What does break-even mean on a single job?
The price at which the job covers its own labor and materials plus its share of the business's overhead, and nothing else. At that price you keep the lights on but earn nothing for the risk, the estimate visit or the work of running the business. It is the floor under a negotiation, not a price to quote.
Is the overhead percentage a share of costs or of revenue?
Of direct costs, in this calculator: overhead share = (labor + materials) × overhead %. Most people know their overhead as a share of revenue, and the two are not the same number. At break-even, overhead that is 20% of revenue is 25% of direct costs; the conversion table on this page covers 10% to 30%. Entering a revenue-based percentage here understates the floor.
What overhead percentage should I use?
Your own: the last twelve months of indirect costs (insurance, truck, tools, phone, software, advertising, licensing, bookkeeping, the hours you spend estimating and invoicing) divided by the last twelve months of direct job costs. There is no safe generic number. For one group only, NAHB's 2024 remodeler data implies operating expenses of about 23.6% of revenue, which is roughly 33.7% of direct costs for those firms; that is derived from their published gross and net margins and describes remodeling companies, not your business.
Should I ever take a job below break-even?
Only knowingly, for a reason you can name, and never as a habit. A loss leader to fill a dead week or to keep a property manager who sends ten jobs a year can make sense once. Pricing below the floor routinely means the business is subsidizing its customers from the owner's pay, and the salary calculator will show it at year end.
How much above break-even should I price?
Enough to carry the profit you want and the surprises this kind of job produces. The calculator does not recommend a margin; it shows the cushion your planned price has. To price from a target margin after overhead and a risk reserve, use the contractor profit calculator, which divides total cost by one minus the margin rather than adding a percentage to cost.
Does the floor include paying myself?
Only if your own hours are in the labor cost. If you entered only a helper's wages, or nothing for labor because you do the work yourself, the floor does not pay you, and every dollar of "profit" is actually your wage. Put your own hours in at the rate you need, from the hourly rate calculator, so the floor and the profit mean what they say.
Check the floor against what the job actually cost
The estimate is a guess until the job is done. Pocket Boss records the hours with a job timer on every plan, and on Essentials and above keeps material receipts with the job, so the next estimate for the same kind of work starts from real labor and material numbers. From $19.99/month, 14-day trial.
Related: contractor profit calculator, contractor markup calculator, job cost calculator, all contractor calculators.