True job cost
True job cost equals loaded labor plus nonlabor direct costs plus allocated overhead plus contingency.
true job cost = loaded labor + direct costs + overhead + contingencyMinimum profitable price
The target gross margin is a percentage of selling price, not cost. Payment-processing cost is also calculated as a percentage of price.
price = true job cost ÷ (1 − target margin − processing rate)Labor burden
Loaded labor includes base wages, variable payroll burden, hourly benefits and insurance. The productive-hour rate divides annual loaded cost by hours available for billable work after paid time off, holidays, training and administration.
Overhead recovery
Annual overhead is spread over realistic annual billable hours rather than all paid hours.
billable hours = workers × productive hours × utilizationEstimate versus actual
Each cost category is compared separately. Profit leakage equals expected profit minus actual profit at the same selling price.
Limitations
These tools support business planning and do not replace accounting, tax, legal, payroll or insurance advice. Users must enter their own current costs.
For plain-English explanations, worked examples and limitations, read the contractor pricing guides.