Contractor Break-Even Calculator

Monthly fixed overhead plus average gross margin gives you break-even revenue, daily break-even, and the number of jobs you need at your typical job size.

Monthly Fixed Overhead ($)

Rent, salaries, insurance, vehicles, software, anything you pay whether or not a job runs.

Average Gross Margin (%)

Margin = (revenue − direct job cost) ÷ revenue.

Average Job Size ($)

Working Days per Month

22 is a common default (5-day weeks × ~4.4 weeks).

warning

Break-even is the floor, not the target. Hitting break-even means you covered overhead with zero net profit. Add your owner pay and target net on top.

Break-Even Revenue / Month

$111,111

Daily: $5,050.51

Monthly Overhead	$20,000
Gross Margin	18.0%
Break-Even Revenue / Month	$111,111
Break-Even Revenue / Day	$5,050.51
Jobs Needed (avg size)	5

Formula: break-even revenue/month = overhead ÷ (gross margin %). Daily = monthly ÷ working days. Jobs needed = ceiling(monthly ÷ average job size). Example: $20,000 overhead at 18% margin = $111,111/mo revenue, $5,051/day across 22 days, or 5 jobs at $25,000 each.

Estimates only. Not financial advice. Confirm with your CPA.

Frequently Asked Questions

What is a typical monthly overhead for a small contractor?

For a 1 to 5 person residential or specialty trade shop, monthly overhead commonly runs $8,000 to $25,000 once you include the owner's draw, office or yard rent, general liability and workers' comp premiums, truck payments and fuel, software, and bookkeeping. Larger GCs with estimators, PMs, and salaried foremen routinely hit $50,000 to $200,000 per month.

What is a healthy gross margin for a contractor?

General contractors typically run 15% to 25% gross margin on hard bids and 20% to 30% on negotiated work. Specialty trades (electrical, plumbing, HVAC, roofing) often run 25% to 40% because they carry more labor risk and tool overhead. Below 15% gross is fragile for a self-performing contractor since one bad change order can wipe the job.

What counts as overhead versus job cost?

Job cost (also called direct cost or cost of goods sold) is anything you would not spend if that job did not exist: field labor, materials, subs, equipment rental for that job, permits, dumpsters, port-a-johns. Overhead is everything you pay every month no matter what: office rent, the bookkeeper, software subscriptions, insurance base premiums, your truck note, owner salary draw, the foreman's salary if they are paid whether on a job or not.

What if my gross margin varies a lot by job?

Use a weighted average from your last 12 months: sum the gross profit dollars from all completed jobs and divide by total revenue. That gives you a more realistic blended margin than just averaging the percentages. If your margin swings wildly (say, 8% on hard-bid public work but 30% on direct-to-owner residential), run break-even twice with each margin to see how mix changes your required revenue.

How the Break-Even Calculator works

Break-even revenue is monthly fixed overhead divided by gross margin. Margin is the share of each revenue dollar left after job costs, so it is the rate at which revenue converts into money available to pay overhead. Dividing overhead by that rate gives the revenue needed to cover it exactly.

From that monthly figure the tool derives two more numbers. Daily break-even is monthly revenue divided by your working days, which turns an abstract target into something a project manager can hold against a schedule. Jobs needed is break-even revenue divided by average job size, rounded up, since a partial job does not close.

Fixed overhead means the costs that continue whether or not work is running: rent, insurance, vehicle payments, software, salaried office staff, owner draw. Field labor, materials, and subcontractors are job costs and belong inside the margin figure instead. Mixing them into overhead double-counts them and inflates the break-even badly.

Worked example: $20,000 of monthly overhead at an 18% gross margin needs $111,111 of revenue to break even. Spread across 22 working days that is $5,051 a day. At an average job size of $25,000 it takes 5 jobs a month to clear it. Lift margin to 22% and the requirement drops to $90,909 and 4 jobs — the same overhead, one fewer job, purely from pricing.

Frequently Asked Questions

How do I calculate break-even revenue for a construction company?

Divide monthly fixed overhead by your gross margin expressed as a decimal. At $20,000 of overhead and an 18% margin, break-even is 20,000 / 0.18 = $111,111 of revenue a month. The intuition is that only 18 cents of each revenue dollar is left to cover overhead, so you need a lot of dollars to cover $20,000.

Why does a small margin change move break-even so much?

Because margin sits in the denominator. At $20,000 of overhead, an 18% margin needs $111,111 of revenue while a 22% margin needs $90,909 — four points of margin cut the requirement by $20,000 a month. This is why margin discipline moves a contractor's break-even far more than cutting overhead does.

What counts as fixed overhead?

The costs you pay whether or not you run a job: office rent, insurance, vehicle payments, software, salaried office staff, and owner draw. Field labor, materials, and subs are job costs — they belong in the margin calculation, not in overhead. Putting job costs in the overhead box will badly overstate your break-even.

Is break-even the same as profitable?

No. Break-even is where gross profit exactly covers overhead and net profit is zero. Every dollar of revenue past break-even contributes its full margin percentage to net profit, which is why the jobs late in a strong month are far more valuable than the early ones.