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.
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.
Results
Fill in the details and select Calculate to see your figures.
Win more of the jobs you quote.
Tradehand gives your trade business a whole office team without hiring anyone: it answers every enquiry, sends your quotes the same day and chases them until they land. There is no monthly fee. Tradehand takes 5% of an invoice, and only when the customer actually pays you, so a quiet month costs you nothing.
Get a free demoHow to use the Profit Margin Calculator
- 1Enter your total annual revenue: the full amount invoiced to customers.
- 2Add your material costs: everything you spend on parts, cables, fixtures, and supplies.
- 3Enter your labour costs: wages paid to employees or subcontractors (exclude your own drawings).
- 4Add your overhead costs: van, insurance, tools, accountancy, marketing, and other fixed costs.
- 5Review your gross and net margins. Aim for a net margin above 15% for a healthy business.
How to work it out yourself
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) |
Disclaimer
This tool gives an estimate for general guidance only, based on typical UK figures and the details you enter. It is not a formal quote, survey, or professional advice. Always confirm with a qualified tradesperson before relying on any figure, as regional prices, site conditions, and current standards vary.
You do the job, Tradehand handles everything around it.
Tradehand sends the quotes, chases the invoices, books the work and keeps your customers updated, for no monthly fee and 5% of an invoice only once the customer has paid. One office hire costs about £25,000 a year, whether the invoices land or not.
Source: Office manager salary, National Careers Service
Get a free demoFrequently 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.
