Revenue is easy to see — it’s what lands in your account. Profit is harder, because it depends on costs you might not track job by job. Here’s how to calculate it, and the difference between the three numbers people mix up most: profit, margin and markup.
Job profit
Gross profit = Revenue − (Labor + Materials + Travel + Equipment + Other)Use revenue before sales tax — tax you collect belongs to the state. A $500 job with $260 of costs earns $240 of profit.
Profit margin
Profit margin = Gross profit ÷ Revenue × 100%$240 ÷ $500 = 48%. Margin tells you how much of every dollar you charge you keep.
Markup
Markup = Gross profit ÷ Cost × 100%$240 ÷ $260 ≈ 92%. Same job, very different-looking number.
Why the difference matters
Say you want a 30% margin and add 30% to a $100 cost. You charge $130 and make $30 — but $30 ÷ $130 is only a 23% margin. To get a true 30% margin you need $100 ÷ 0.70 = $142.86.
| Markup on cost | Resulting margin |
|---|---|
| 25% | 20.0% |
| 43% | 30.1% |
| 50% | 33.3% |
| 100% | 50.0% |
Job profit vs. business profit
Job profit only subtracts costs tied to that job. Your business also has overhead — insurance, phone, software, marketing, accounting — that you pay whether or not you clean. Your margin on jobs has to cover that overhead before the business actually makes money. And business profit isn’t the same as what you take home after income and self-employment tax.
Common profit leaks in cleaning businesses
- Underestimated time — the job you quoted at 3 hours takes 4.
- Unpaid travel — long drives between jobs that aren’t in the price.
- Discounts without math — 10% off a 20%-margin job removes half your profit.
- Counting your own labor as profit — if you clean, part of the “profit” is really your wage.
Run your recent jobs through the profit calculator and you’ll quickly see which job types are worth chasing.