Project Profitability Calculator
Free project profitability calculator: turn revenue, hours worked, cost rate, and expenses into project cost, profit, and margin.
Enter the project numbers
Enter what you billed, the hours worked, your average cost per hour, and any direct expenses.
How the project performed
The effective hourly rate is revenue divided by hours worked - a quick check of whether the project earned its time.
How project profitability is calculated
Hours worked times your average cost per hour is the labor cost. Add direct expenses for the total cost, then subtract that from revenue to get profit. Profit divided by revenue is the margin.
The result is only as good as the hours behind it. Sandtime.io records project time and cost as work happens, so profit and margin reflect what really went in.
Profitability questions
Is this margin or markup?
Margin is profit as a share of revenue, so a project billing 12,000 with 9,000 of cost has a 25% margin. Markup compares profit with cost instead, which makes the same project look like 33%. Quote whichever your business uses, but do not mix them.
What is the effective hourly rate telling me?
It is what the project actually paid per hour: revenue divided by hours worked. Compare it with the rate you quoted, and the gap is what scope creep and unbilled work cost you.
Which cost rate should I enter?
Use the loaded cost of the people who did the work, not their salary divided by hours. Salary alone leaves out employer taxes, benefits, equipment, and paid time off, and a margin built on it flatters the project.
What belongs in expenses?
Direct expenses billed to the project: subcontractors, licenses bought for it, travel. Overheads that would exist without the project belong in a company-wide calculation instead.
How accurate is the result?
Only if the hours are right. The arithmetic is exact, but hours reconstructed at month end usually undercount, which makes every margin here look better than it was.
Know each project’s real margin
Sandtime.io records project hours and cost as work happens and reports on profit, margin, and utilization, so pricing decisions rest on real data. Free for unlimited users, without surveillance.