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.
Rent, salaries, insurance, vehicles, software, anything you pay whether or not a job runs.
Margin = (revenue − direct job cost) ÷ revenue.
22 is a common default (5-day weeks × ~4.4 weeks).
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.