Enter your revenue and direct costs to see your gross profit, gross margin and markup, and the revenue you need to hit a target. No account needed.
Updated
The short answer
Gross margin = (revenue − direct costs) ÷ revenue. A month with $8,000 of revenue and $5,200 of direct costs has $2,800 of gross profit, a 35% gross margin.
Gross margin is what is left to pay for overhead and your own profit. In job terms, Margin = profit ÷ price, and Markup = profit ÷ cost. That same month has a 53.8% markup.
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What you billed, before GST/HST
Job labour and materials
Must be under 100%, with the same direct costs
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A two-person crew bills $8,000 in a month, before GST/HST. Job wages and materials come to $5,200.
To reach a 40% gross margin with the same direct costs, revenue must be $5,200 ÷ 0.60 = $8,666.67. That is $666.67 more for the same work, which means a price rise of about 8.3%.
The GST/HST you collect belongs to the CRA, so it is not revenue. If your total includes 13% HST, divide by 1.13 first: $1,130 is $1,000 of revenue.
One month can mislead you if a big materials bill lands early. Compare a few months, or work out the margin for each job with the profit margin calculator. If you price from cost, the markup calculator shows what a markup gives you. To plan for tax on what is left, use the self-employed tax calculator.
Gross margin = (revenue − direct costs) ÷ revenue × 100. With $8,000 of revenue and $5,200 of direct costs, gross profit is $2,800 and gross margin is 35%.
Gross margin only takes off the direct costs of the work. Net margin also takes off overhead, such as insurance, office costs and software.
Costs that rise and fall with the work: job labour, materials, subcontractors and supplies used on the job. Costs you pay in a quiet month are usually overhead.
No. Gross profit is a dollar amount, and gross margin is that amount as a percentage of revenue.
It depends on your trade and how much overhead you carry. The useful test is whether your gross profit covers your overhead and leaves the profit you want.
Yes. If direct costs are more than revenue, you lost money on the work before overhead. The calculator shows the loss.
Monthly works for most small operators. It shows whether your prices keep up with your costs, one month against another.
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Not ready? Try the free invoice generatorThis page is general information, not financial, legal, or tax advice. We gathered it from public sources (banks, payment providers, government agencies such as the CRA, and published industry rates), and it reflects our understanding when it was last updated. Rates, limits, fees, and rules change without notice, and your situation may differ from the general case.
Before you rely on anything here, do your own due diligence: confirm the details with the original source, and check that they are still current. For advice about your own finances, taxes, or legal position, hire a qualified professional such as an accountant, lawyer, or financial advisor. See our Terms for the full disclaimer. Last updated October 31, 2026.