What is a good profit margin for a contractor?

A healthy net profit margin runs about 8% to 20% depending on the trade. Specialty trades like electrical, HVAC, and plumbing often run higher net margins than general remodeling because labor is skilled and overhead is leaner. Net is after overhead; gross margin per job is usually higher.

Which trades have the highest profit margins?

Service-and-repair trades with skilled labor and low material cost tend to run the best net margins: electrical, HVAC service, plumbing repair, and similar. Heavy-material or subcontractor-driven work like general remodeling and new construction usually runs thinner because more of the price passes through to materials and subs.

How do I calculate my contractor profit margin?

Gross margin per job is (price minus job costs) divided by price. Net margin is profit after all overhead divided by total revenue. Track gross margin per job, not just revenue, so you can see which kinds of work actually make money and which only look busy.

How can contractors make more profit?

Bid with the correct markup for your target margin, put change orders in writing, cut rework with clear scopes, and steer toward higher-margin work. A steady flow of qualified leads is what lets you say no to low-margin jobs instead of taking them to stay busy.

Contractor profit margin: what to aim for by trade

A healthy contractor net profit margin runs about 8% to 20%, and where you land depends heavily on your trade. Skilled service-and-repair trades — electrical, HVAC, plumbing — tend to run the higher end because labor is the product and material cost is low. Heavy-material or sub-driven work runs thinner. The biggest mistake across all of them is the same: confusing markup with margin.

We build websites and SEO for the trades and run our own service companies, so this is the practical version: what to aim for, how to calculate it, and how a full pipeline protects the number.

Rough net margins by trade

Ballpark net margins after overhead. Yours will vary with overhead and how you bid, but the pattern holds.

Service & repair trades

~12–20%

Electrical, HVAC service, plumbing repair, and similar. Skilled labor with low material pass-through and leaner overhead, so more of each job stays as profit when priced right.

Remodeling & finishes

~10–15%

Kitchens, baths, flooring, painting. More materials and coordination, so margins sit in the middle. Tight scopes and change-order discipline matter most here.

New construction & heavy build

~8–12%

More of the price passes through to materials and subs, so net margins run leaner. Volume and project management carry the profit, not markup alone.

Markup vs. margin, and how to calculate it

→ Markup is added to your cost; margin is the profit share of the final price. A 20% markup is only a 16.7% margin.
→ Gross margin per job = (price − job costs) ÷ price. Track this per job to see which work actually pays.
→ Net margin = profit after all overhead ÷ total revenue. This is the number that tells you if the business is healthy.
→ To hit a target margin — for 25% margin, mark up ~33%; for 20%, mark up 25%. Bid in markup, judge in margin.

When more leads won't fix it

Here's the honest part most agencies skip: marketing isn't always your problem.

• If you underprice every job, more leads just means losing money faster. Fix the markup-to-margin math first.
• If change orders and rework eat your jobs, no amount of traffic helps. Tighten scopes and bill every change.
• If you're already booked solid at a healthy margin, spend on capacity, not lead generation.

Where lead flow does help: it lets you be selective. With enough qualified work coming in, you can decline the low-margin jobs instead of taking them to stay busy — and that's what holds your margin over a year.

We don't post stock testimonials. On a 15-minute call we screen-share the real dashboards behind our own businesses — live leads, rankings, and the exact page that produced each one. See the proof →

Where we fit

Once your bidding is right, a steady pipeline lets you protect margin. We build the site and run the SEO that fills it — AI lead capture from $249/mo, the SEO engine and attribution at $597/mo. Month-to-month, and you own everything.

See SEO for contractors, contractor website design, the general contractor margin guide, or SEO for home services.

Common questions

Which trades make the most?

Skilled service-and-repair trades — electrical, HVAC, plumbing — usually run the best net margins because labor is the product and material cost is low.

How do I calculate gross margin per job?

(Price − job costs) ÷ price. Track it per job, not just total revenue, so you can see which work actually pays and which only keeps you busy.

Will marketing raise my margin?

Indirectly. It can't fix underpricing, but enough qualified leads let you decline low-margin jobs instead of taking them to stay busy.

A pipeline that protects your margin.

Send your company name and metro — we'll confirm your market is open and build a working demo within 48 hours. Free, no card, no commitment.

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