Gross margin
(Revenue − assigned direct costs) ÷ Revenue × 100
A $1,000 scenario with $400 of consistently defined direct costs produces $600 of gross profit and a 60% gross margin. It says nothing by itself about overhead, tax, debt, or net profit.
Plumbing margin guide
Calculate plumbing margins from your own job data
Use consistent formulas, cost definitions, and completed-job records. This guide does not present unsourced “typical” margins or tell you what your business should earn.
The two calculations answer different questions
Net margin
Net profit under your accounting method ÷ Revenue × 100
Net profit requires a complete, reconciled view of the business. Owner compensation, depreciation, interest, tax, accruals, and other items can change the result, so use your accountant’s definitions.
A repeatable service-level review
1
Define the unit
Measure one Job, one service category, one crew, or one reporting period. Do not mix unlike periods or scopes.
2
Record direct costs
Use the same policy for field labor, materials, subcontractors, permits, equipment, disposal, callbacks, and warranty work.
3
Allocate overhead consistently
Document how vehicles, insurance, office time, software, rent, marketing, and other indirect costs are assigned.
4
Separate gross from net
Gross margin and net margin answer different questions. Label reports clearly and keep owner pay, tax, and debt treatment consistent.
5
Compare estimates with actuals
Review completed work, investigate variances, and update services or pricing based on your own evidence.
What PocketBoss can document
Projects can hold budgets, entered labor, expenses, subcontractor costs, change orders, invoices, payments, and a calculated profitability view. Jobs, Visits, photos, notes, and customer history provide operational context.
What the calculation cannot prove
PocketBoss does not infer missing product use, reconcile a general ledger, validate tax treatment, set a profitable price, or guarantee margin improvement. Results are only as complete as the data and definitions entered.
Frequently asked questions
What is a good profit margin for a plumbing business?
There is no universal plumbing margin. The useful target is one built from your actual direct costs, overhead, owner compensation, debt, capacity, risk, taxes, and business plan. Compare consistently calculated gross and net margins over time and review the method with your accountant.
What is the difference between gross margin and net margin?
Gross margin compares revenue with the direct costs assigned to the work. Net margin accounts for the remaining business expenses under your chosen accounting method. If revenue is $1,000 and direct costs are $400, gross profit is $600 and gross margin is 60%; that is not the same as net profit.
Which plumbing services are most profitable?
Only your completed-job data can answer that reliably. Compare revenue with consistently entered labor, materials, subcontractors, permits, callbacks, warranty work, drive time, equipment, and allocated overhead for each service category.
How should I mark up plumbing materials?
Choose a policy that accounts for acquisition, freight, storage, handling, waste, warranty exposure, financing, taxes where applicable, and target return. A markup is calculated on cost; margin is calculated on selling price, so the percentages are not interchangeable.
Can PocketBoss calculate plumbing profitability?
PocketBoss Projects can compare recorded budgets, labor, expenses, subcontractor costs, change orders, invoices, and payments. The result depends on complete and correctly categorized inputs and is not a replacement for reconciled accounting statements or professional advice.
Related tools and guidance
Test the workflow with one completed job
Enter the estimate, time, costs, change orders, invoice, and payment status, then compare the result with your accounting records.
Start the 14-Day Trial