Profit formulas
Total cost = Labor + Materials + Travel + Equipment + Other expensesGross profit = Revenue − Total costProfit margin = Gross profit ÷ Revenue × 100%Cost ratio = Total cost ÷ Revenue × 100%Markup = Gross profit ÷ Total cost × 100%Worked example
A move-out clean you priced at $500:
| Revenue | $500.00 |
| Labor | $180.00 |
| Materials | $40.00 |
| Travel | $20.00 |
| Equipment | $10.00 |
| Other expenses | $10.00 |
| Total cost | $260.00 |
Profit is $500 − $260 = $240. Margin is $240 ÷ $500 = 48%, and costs take 52% of revenue. Markup on cost is $240 ÷ $260 ≈ 92.3%.
Using profit to make better pricing decisions
- Check before you accept. If a customer asks for a discount, plug in the lower price and see whether the job is still worth doing.
- Compare job types. Run your standard, deep and move-out jobs through the calculator — you may find one is far more profitable per hour than the others.
- Watch the cost ratio. If costs creep above what you expect, it’s usually labor time. Re-time your jobs and update your estimates.
Need to set a price rather than check one? Use the cleaning estimate calculator.
Frequently asked questions
How do I calculate my profit margin?
Profit margin = (Revenue − Total cost) ÷ Revenue × 100%. If you charge $500 and the job costs $260, profit is $240 and the margin is $240 ÷ $500 = 48%.
What's the difference between margin and markup?
Margin is profit as a share of the price. Markup is profit as a share of the cost. A job that costs $100 and sells for $150 has a 50% markup but a 33.3% margin. Mixing them up is one of the most common pricing mistakes.
What is a good profit margin for a cleaning business?
There's no single right number — it depends on whether your labor cost already includes your own pay, your overhead and your local market. Treat the margin as what's left for the business after every job cost, and set a target that covers overhead, slow weeks and taxes.
Is this the same as my business's net profit?
No. This is job-level operating profit based on the costs you enter. Your business's net profit also subtracts overhead that isn't tied to a specific job (insurance, marketing, software) and income taxes.
Should sales tax be included in revenue?
No. Enter revenue before sales tax. Any sales tax you collect is owed to the state, so it isn't income for your business.