What is job costing?
Job costing is the practice of attaching every dollar a job consumes, from crew hours to dump fees, to that one job, and comparing the total against what the customer agreed to pay. This free job cost calculator runs the full calculation for you: enter the contract price, loaded labor, materials, equipment, subcontractors, other costs, and overhead, and it returns the job's total cost, profit, net margin, and markup instantly. It is the same math a contractor should run before signing any bid.
Job costing answers a question general accounting can't: not "did the company make money last month" but "is this specific job making money right now". Contractors who skip it find out a job lost money only after it's finished, when nothing can be fixed. This calculator gives you the number before you commit.
How the job cost formula works
The calculator builds a job's cost in layers, and each layer feeds the next. The full chain looks like this:
- Loaded labor = hours × wage × (1 + burden%)
- Direct cost = loaded labor + materials + equipment + subcontractors + other
- Overhead = direct cost × overhead rate
- Total cost = direct cost + overhead
- Profit = contract price - total cost
- Net margin = profit ÷ contract price
- Markup = profit ÷ total cost
Every line matters because a miss in one layer compounds into the next. Understate burden and the labor line comes in too low. Forget overhead and the cost comes in too low. Either one quietly turns a "winning" bid into a losing job.
Loaded labor
Loaded labor is what a worker actually costs you per hour, and it is never the wage on the paycheck. The burden percentage captures everything you pay beyond that base wage: employer payroll taxes, workers comp, health insurance, retirement contributions, paid time off, and training. For example, 640 hours at $34 an hour with a 28% burden is 640 × $34 × 1.28 = $27,853, not the $21,760 the paychecks show. Bid with the raw wage and you hand the difference back on every job. The labor cost calculator computes the loaded rate for any wage.
Materials, equipment, subcontractors, and other direct costs
Direct costs are the categories that belong to this job and only this job:
- Materials: lumber, fixtures, paint, everything you buy and install.
- Equipment: rentals, fuel, and repairs charged to the project.
- Subcontractors: the trades you hire for the parts you don't do yourself.
- Other: permits, dump fees, site cleanup, and the odds and ends with no natural home.
On the example below those four lines add $57,700: $31,000 of materials, $6,500 of equipment, $18,000 of subcontractors, and $2,200 of other.
Overhead
Overhead keeps the company running: office rent, insurance, bookkeeping, trucks, tools, and software. It doesn't attach to any single job, so the standard approach is to apply it as a percentage of direct cost. At 12% of the $85,553 direct cost, overhead adds $10,266 to this job. Contractors who skip this line price overhead at zero and quietly subsidize the business out of their own profit.
Worked example: a $120,000 kitchen remodel
Here is the full picture, and it uses the exact numbers the calculator starts with when you open it. A $120,000 kitchen remodel, 640 hours of crew labor at $34 an hour with a 28% burden, $31,000 of materials, $6,500 of equipment, $18,000 of subcontractors, $2,200 of other costs, and 12% overhead.
| Line item | Amount |
|---|---|
| Contract price | $120,000 |
| Loaded labor (640 hrs × $34 × 1.28) | $27,853 |
| Materials | $31,000 |
| Equipment | $6,500 |
| Subcontractors | $18,000 |
| Other | $2,200 |
| Direct cost | $85,553 |
| Overhead (12% of direct cost) | $10,266 |
| Total cost | $95,819 |
| Profit | $24,181 |
| Net margin | 20.2% |
| Markup on cost | 25.2% |
Walk through the layers: direct cost lands at $85,553, overhead brings the total to $95,819, and the $120,000 price leaves $24,181 of profit, a 20.2% net margin. Labor is the biggest lever; loaded labor alone is about a third of direct cost. A 20.2% margin is a strong job by the calculator's own guidance, and it holds up in practice. Notice the two percentages at the bottom: 20.2% margin and 25.2% markup describe the same profit, and mixing them up is a classic pricing error.
Margin vs. markup: why both matter
Margin is profit divided by the contract price. Markup is profit divided by total cost. On this job: $24,181 ÷ $120,000 = 20.2% margin, while $24,181 ÷ $95,819 = 25.2% markup. Same dollar profit, two different percentages, because the denominators are different.
The confusion costs real money. A contractor who says "I want 25% markup" and believes that's a 25% margin is setting the wrong price. Markup is computed on the smaller cost base, so a 25% markup only produces a 20% margin. To reach a 25% margin on this job you would need a price above $120,000. The markup calculator converts between the two so the number you quote is the profit you actually keep.
Free calculator vs. job costing software
The free job cost calculator is a snapshot: the cost and profit you expect at bid time. What it doesn't do is track what actually happens after you win the job. Real jobs change. Crews run longer, material prices move, change orders appear, and subcontractor invoices rarely match the quote.
That's the difference between a job cost calculator and a job cost tracker, and it's the argument for job costing software. The software tracks actual hours, receipts, and subcontractor invoices against the budget this calculator builds, and flags a job the moment it drifts. When a $95,819 estimate starts running to $105,000, you find out in week three instead of at the final invoice. This page is job costing software, free, for the estimate side of the work; see the pricing page for what the full product adds, or read about construction job costing software to see how actuals stay honest. A bid is only as good as the tracking behind it.
Job cost calculator FAQ
How do you calculate job cost?
Add loaded labor (hours × wage × (1 + burden%)), materials, equipment, subcontractors, and other direct costs, then apply overhead as a percentage of direct cost. Subtract the total from the contract price for profit, and divide profit by the price for margin. This calculator runs the whole chain as you type.
What is a good profit margin for a construction job?
Most healthy contractors target 15 to 25% net margin, the range this calculator uses as its guide. Below 10% is thin for most work; one surprise can wipe it out.
What's the difference between margin and markup?
Margin is profit divided by the price; markup is profit divided by cost. The same $24,181 profit on this job is a 20.2% margin and a 25.2% markup.
Does job cost include labor burden?
It should. Loaded labor includes the burden percentage, which covers payroll taxes, workers comp, insurance, benefits, and paid time off. Bidding with the raw wage understates cost on every job.
Is this job cost calculator really free?
Yes. It runs in your browser, needs no signup, and uses the same formulas the software applies to every job. The paid product adds tracking, budget alerts, and profit-per-job reports.
Key takeaways
- Job cost is the sum of loaded labor, materials, equipment, subcontractors, and other direct costs, plus overhead applied as a percentage of direct cost.
- Loaded labor matters: 640 hours at $34 with a 28% burden costs $27,853, not the $21,760 the paychecks show.
- Margin and markup are different numbers: this job earns 20.2% margin and 25.2% markup on the same profit.
- A calculator prices the job; a job cost tracker protects the price by watching actuals against budget.
Conclusion
Job costing is easy to describe and easy to skip, and the difference shows up on the bottom line. This job cost calculator runs the complete formula on any job you enter: loaded labor, direct costs, overhead, then profit, margin, and markup. On the $120,000 fixture the job earns $24,181, a 20.2% margin. The number is only as good as your inputs, which is why the calculator hands off to job costing software once the work starts. Price the job right, then track it to the end.