Job Gross Margin (Trades)

It shows how much of each job is left after the direct cost to do the work — before shop rent, trucks, and office payroll.

Formal definition

Job gross margin equals job revenue minus direct job costs (materials and field labor), divided by job revenue.

Why it matters

If job margin is under 40%, overhead and callbacks often turn a busy schedule into a break-even month.

Where you see it

• Service company job costing reviews
• HVAC and plumbing franchise KPIs
• Estimator training programs
• Bonding and bank covenant discussions
• Small contractor bookkeeping classes

Worked example

1. Job revenue: $8,000.
2. Direct materials and labor: $4,400.
3. Gross profit: $3,600.
4. Job gross margin = ($3,600 ÷ $8,000) × 100 = 45%.
5. Interpretation: 45¢ of each job dollar covers direct cost; the rest must fund overhead and profit.

How Business metrics calculates it

(Job revenue − Direct job costs) ÷ Job revenue × 100.

The range we use for status labels

On Business metrics, the status band for this KPI is roughly 40 to 55. Higher values are generally healthier in this band. Your niche can sit outside it honestly — the label is a prompt to read the coaching, not a certificate.

Where people fool themselves

Job margin that ignores warranty callbacks will look like a hero quarter. Callbacks are still that job. Put them in cost or stop calling the margin job-level.

Run it on your own numbers: the Trades & Home Services calculator.