What is a good profit margin for a trades job in Canada?
Gross margins of 40–60% are typical for skilled trades jobs in Canada, with net margins (after overhead) of 15–25% considered healthy. The right margin depends on your overhead load — a solo operator with a home office has very different fixed costs than a crew of five. Use this calculator to check your margins before you accept the job, not after.
What is the difference between gross margin and net margin?
Gross margin is what is left after subtracting direct job costs (materials + labour) from your revenue. Net margin is what is left after also subtracting overhead — vehicle, insurance, tools, software, marketing, and admin. This calculator shows both, so you can see whether a job is actually profitable once all your real costs are factored in.
How should I calculate labour costs for a job?
Multiply your hourly rate by the estimated hours, then factor in any subcontractors or helpers at their actual rates. Do not forget to include drive time, setup, and cleanup in your hours estimate. Unpaid time on a job erodes your actual margin more than most contractors realize — especially on smaller residential jobs.
What overhead percentage should trades contractors use?
A typical Canadian trades business runs 20–35% overhead as a percentage of revenue. This covers vehicle costs, insurance, tool replacement, software subscriptions, accounting, marketing, and unbillable admin time. If you are unsure, track your monthly fixed costs for 90 days to get your real number — most contractors undercount overhead by 15–25%.
What is markup versus margin?
Markup is applied to your cost to arrive at a selling price — a 30% markup on $1,000 in costs gives a $1,300 quote. Margin is the profit as a percentage of that selling price — the same example gives a 23% margin. They are not the same number. When contractors say they aim for "30% margin," they often mean markup, which produces a lower actual margin than expected.
