Project Profitability Calculator

What this tool can do

Combine direct and labor costs. Calculate project profit and margin. Show effective hourly profit. Model fixed-price project economics.

Formula and methodology

Project profit = project revenue − direct costs − (delivery hours × internal hourly cost).

Worked example

A €10,000 project with €1,500 direct costs and 100 hours at €40 costs €5,500 and produces €4,500 profit at a 45% margin.

Use an internal cost rate

Hourly cost is the cost of delivery time, not necessarily the price charged to the client. Include salary, contractor cost, or another consistent internal basis.

Keep project scope consistent

Revenue, expenses, and hours must refer to the same project scope and period for the margin to be meaningful.

Privacy

Calculations and draft documents run in your browser. Entered values are not included in FollowIncome analytics events.

Next step

Use the result as a planning aid, then track actual invoices, payments, expenses and projects in FollowIncome.

Frequently asked questions

What costs belong in project profitability?

Include direct purchases, contractor costs, and the chosen internal cost of delivery time. Add overhead only when your decision requires it.

What is project margin?

Project profit divided by project revenue, multiplied by 100.

Is this the same as cash collected?

No. Profitability can use earned or invoiced revenue, while cash collected depends on payment timing.

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