Free tool · UK trades & service businesses
Profit Margin Calculator — UK Tradespeople
Enter what you charged and your actual costs to see your gross profit, net profit, and margin percentage. Useful for checking whether a job was genuinely worth it.
Markup vs margin: the difference that matters
Markup and margin are not the same number. Markup is the percentage added to your costs to reach your price. Margin is the percentage of the final price that is profit. A 50% markup on £100 of costs gives you a £150 price — but the margin is only 33%, not 50%.
This matters when comparing job types or setting a minimum acceptable margin. If you target a 30% profit margin, you need to apply a 43% markup to your costs — not 30%. The calculator above works with margin, which is the more useful measure for comparing jobs against each other.
What to include in your job costs
An accurate margin calculation requires all costs, not just materials. Common items that tradespeople omit:
- Your labour time — including travel to site, a return trip for a forgotten part, and any time spent troubleshooting before the work was scoped.
- Materials at actual cost — including delivery charges, any wastage, and items that weren't on the original materials list.
- Overhead allocation — your van costs, insurance, tools, and software are real costs that belong in every job, not just absorbed as personal expenses.
- Subcontractor costs — if you brought in help, their cost belongs in this job's margin calculation.
- Payment processing fees — if you accept card payments, the processing fee (typically 1.5–2.5%) reduces your effective margin.
What is a healthy profit margin for a UK tradesperson?
A gross margin of 25–35% is generally considered healthy for a UK trades business. Below 15% is a warning sign — it means most of your revenue is being consumed by costs, leaving very little for growth, tax payments, quiet periods, or unexpected expenses.
The target varies by trade, job type, and whether materials are included. Labour-only jobs (cleaning, gardening, decorating) typically have higher margins than material-heavy work (plumbing installations, rewires, building work) because the cost base is lower.
Profit Margin Calculator
Enter what you charged and what the job actually cost you. See your real margin in seconds.
Why margins disappear in the trades
Most tradespeople can tell you what they charged for a job. Far fewer can tell you what it actually cost them — accurately. The gap between the quoted price and the real profit is where the business health question lives.
Underpricing on a best-case scenario
You price assuming everything goes to plan. The job takes an hour longer. The material cost was wrong. The customer adds scope on the day. The margin disappears before you invoice.
Materials forgotten or untracked
Small material costs — fixings, consumables, a second-trip item — don't make it into the invoice. Individually minor. Across 50 jobs a year, significant.
Return visits not charged
A return visit to finish a job or fix a small issue feels difficult to charge for. Untracked, it eats directly into the margin on the original job.
Admin time not factored in
The time spent quoting, chasing invoices, ordering materials, and handling customer questions is real time with a real cost — rarely allocated as overhead in a job-by-job margin calculation.
Frequently asked questions
How do I calculate my profit margin on a job?
Profit margin = (Revenue - Total Costs) / Revenue × 100. For example, if you charge £800 and your total costs (labour, materials, overhead) are £560, your profit is £240 and your margin is 30%. Use the calculator above to calculate this instantly for any job.
Should I include VAT in my profit margin calculation?
No — use the ex-VAT (net) figure for your revenue. VAT is collected on behalf of HMRC and passed straight on; it is not your revenue. Your quoted price ex-VAT is the starting point for a profit margin calculation.
Why do tradespeople often underestimate their job costs?
The most common hidden costs are: return visits for materials, time spent on admin and quoting that isn't charged out, vehicle fuel and wear, tool depreciation, and the cost of unpaid invoices. Most tradespeople calculate labour and materials accurately but forget overhead allocation — which is why margins end up lower than expected.
What is a good profit margin for a tradesperson?
A healthy gross margin for a UK tradesperson is typically 25–35% after deducting labour, materials, and direct overhead. Margins below 15% are a warning sign — it means most of the revenue is going to costs and there is little left for growth, tax, slow periods, or unexpected expenses.