Free Profit Margin Calculator
Calculate your net and gross profit margins. Enter your revenue and costs to see your true profitability and compare against industry benchmarks.
Profit Margin Calculator results
Fill in the details and select Calculate to see your figures.
This profit margin calculator helps electricians understand their true profitability. Enter your total revenue and costs to instantly see your gross and net profit margins. Use the presets to compare typical margins for different business types, and benchmark your results against industry averages.
How to use the Profit Margin Calculator
- Enter your total annual revenue: the full amount invoiced to customers.
- Add your material costs: everything you spend on parts, cables, fixtures, and supplies.
- Enter your labour costs: wages paid to employees or subcontractors (exclude your own drawings).
- Add your overhead costs: van, insurance, tools, accountancy, marketing, and other fixed costs.
- Review your gross and net margins. Aim for a net margin above 15% for a healthy business.
How the Profit Margin Calculator works
Margin measures profit as a share of the price you charged. Not a share of your costs. That distinction is where most trades lose money: a 50% markup is only a 33% margin.
- You invoice a job at £1,500. Materials, labour and overheads cost you £1,050.
- Profit = £1,500 − £1,050 = £450.
- Margin = £450 ÷ £1,500 × 100 = 30%.
- The same £450 profit on £1,050 of cost is a 43% markup. Always quote from the price, not the cost.
Include your overheads (van, insurance, tools, admin) before you call it profit. A 'gross margin' that ignores overheads flatters the number and hides a loss-making job.
Typical UK benchmarks
- Trade businesses reporting lower-than-expected profits
- 52% of members who saw rising costs reported lower-than-expected profits or a loss (FMB State of Trade Survey, Q4 2024)
- Trade businesses seeing material costs rise
- 54% saw material costs increase quarter-on-quarter, squeezing margin further (FMB State of Trade Survey, Q4 2024)
See it in your business.
Frequently asked questions
What is a good profit margin for an electrician?
There's no single official average to hit; accountants working with trades commonly use a rule of thumb of 15-25% net margin as healthy, with sole traders (lower overheads) nearer the top and firms carrying employees nearer the bottom. That's a target, not a national statistic: the FMB's State of Trade Survey (Q4 2024) found 52% of members who saw rising costs reported lower-than-expected profits or a loss, so plenty of trade businesses are running well below any 'typical' figure right now.
What is the difference between gross and net margin?
Gross margin is your revenue minus direct job costs (materials and labour), expressed as a percentage. Net margin deducts all costs including overheads like van, insurance, and tools. Net margin is your true profitability.
How can I improve my profit margin?
Focus on three areas: increase your charge-out rate to reflect your skills and certifications, reduce material waste by ordering accurately, and control overheads by reviewing subscriptions and insurance annually.
Does VAT affect my profit margin?
No. VAT is collected on behalf of HMRC, not income, so calculate margin on ex-VAT figures. If you are VAT registered, use net (ex-VAT) revenue and net costs. Reclaiming VAT on materials means your true material cost is the ex-VAT price, which slightly improves your real margin.
How does CIS affect my margin as a subcontractor?
Under the Construction Industry Scheme, contractors deduct 20% (or 30% if unverified) from your labour element and pay it to HMRC as an advance on your tax. It does not change your profit margin. It is a cashflow timing issue. Calculate margin on the full invoice value, then treat the CIS deduction as tax paid early.
