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Contractor Estimate Calculator

Itemize labor, materials, equipment, subcontractors, and other costs; add overhead and markup percentages; apply sales tax; get the estimate total. Cost-plus pricing for residential and small commercial contractors.

Labor

HoursHourly rate

$

Materials

$

Equipment

$

Subcontractors

$

Other costs

$

Overhead %

%

Markup %

%

Sales tax %

%

Labor: $0.00
Materials: $0.00
Equipment: $0.00
Subcontractors: $0.00
Other costs: $0.00
Direct cost: $0.00
Estimate total: $0.00

This calculator applies markup (% of direct cost), not margin (% of selling price). 15% markup on $1,000 direct cost = $150 markup and ~13% gross margin on the final price.

How this is calculated

Cost-plus pricing model. Each direct-cost category is summed, then overhead and markup are applied as percentages of direct cost, then sales tax is applied to the cost-plus total.

1.Labor
hours × hourly rate
2.Direct cost
labor + materials + equipment + subcontractors + other costs
Each category sums its individual line items independently.
3.Overhead
direct cost × ( overhead % / 100 )
Indirect costs not tied to one job — vehicles, insurance, office, admin time. 10–15% is typical for small residential.
4.Markup
direct cost × ( markup % / 100 )
Markup is a % of cost — NOT margin (% of selling price). 15% markup = ~13% gross margin on the final price.
5.Pre-tax total
direct cost + overhead + markup
6.Sales tax
pre-tax total × ( tax % / 100 )
Tax rules vary widely by state and trade. Many states tax materials but not labor; some tax both.
7.Estimate total
pre-tax total + sales tax

This calculator uses markup (% of direct cost), not margin (% of selling price). The two are different. Make sure your overhead and markup numbers are based on real cost data from prior jobs — not guessed.

The pricing model this calculator uses

Most contractors who go out of business priced as direct cost + a number that felt right. The cost-plus model used here is the industry standard and the only one that scales:

Direct cost = labor + materials. The actual hours and materials a job will consume.
+ Overhead = a percentage that covers your indirect costs (vehicles, insurance, admin, the time you spend estimating). Typically 10-15% for small residential.
+ Profit = what you keep after covering direct cost and overhead. Typically 10-20% for residential.
+ Sales tax if applicable in your state on the work being performed.

Total estimate = the price you quote the client. Skipping overhead or markup can put a job at break-even at best — real-world surprises (a bad delivery, a sick day, a tool that breaks) come out of margin that does not exist unless you priced it in.

Example: a small kitchen remodel

A small contractor estimates a 2-week kitchen refresh:

Labor: demo $1,500 + rough-in $2,000 + finish $3,500 = $7,000
Materials: cabinets $4,500 + countertop $2,200 + fixtures $800 + miscellaneous $500 = $8,000
Direct cost: $15,000
Overhead at 12%: $1,800
Profit at 15%: $2,520
Subtotal before tax: $19,320
State sales tax on materials only at 8%: $640
Total estimate: $19,960

The mistake junior contractors make: they quote $15,500 (a little over direct cost) thinking they'll “make it up on the next one.” They don't. The next one quotes the same way. After a year of breakeven jobs, they close.

Why a written estimate has to do more than show a number

A contractor estimate that is just a number on a sticky note loses to a competitor whose estimate is on a formatted document — even when the price is identical. Clients shopping multiple contractors use the estimate document itself as a proxy for how organized the rest of the job will be. A professional estimate includes:

Your business name, license number, and contact info
Client name and project address
A clear written scope of work (what's included, what's NOT)
Itemized labor and materials lines
Overhead, profit, and tax shown transparently (or rolled into the price)
Estimate expiration date (30 days standard)
Deposit and payment schedule
Exclusions and assumptions
Signature block

All of that is in the Contractor Estimate & Quote Pack — a formatted, fillable template you customize once and reuse for every estimate.

Estimate document template

Contractor Estimate & Quote Pack

Professional 2-page estimate with materials/labor breakdown, scope of work, change order, and bid comparison

$12.99Get the Estimate Pack

For contractors running multiple jobs

If you have more than 3-5 jobs in flight at any time, a single estimate template stops being enough. You need a project control workbook to track estimates, deposits, change orders, materials orders, payment schedules, and final billings across every active project — without losing one in a paperwork shuffle.

10-sheet Excel project workbook

Contractor Project Control Kit + 6 Core Contracts

$49.00View the Project Control Kit →

Related contractor resources

For practical repair and maintenance guidance that complements contractor work, see FixItReal's home repair articles.

Contractor estimate FAQs

What overhead percentage should a contractor use?

For most small residential contractors, 10-15% overhead is typical. Overhead covers indirect costs: vehicles, fuel, tools, insurance, office or storage, software, admin time, and the cost of estimating jobs you don't win. If you don't know your number, calculate last year's indirect costs and divide by direct labor + materials revenue.

What markup percentage should a contractor use?

This calculator applies markup as a percentage of direct cost (cost-plus pricing). Typical residential contractor markup ranges from 10–25%, with the right number for your business depending on your industry, location, and overhead structure. Note that markup is not the same as gross margin — a 15% markup on direct cost works out to roughly a 13% gross margin on the final selling price. The actual right number for your business is best derived from real cost data from past jobs.

Should I include sales tax on the estimate?

It depends on your state and trade. Sales tax treatment of contractor labor versus materials varies by state, and some trades have special rules. Verify the current rules for your jurisdiction with your state Department of Revenue, and either include tax as a line item or note clearly that the estimate is "plus applicable sales tax."

What's the difference between this calculator and a contractor estimate template?

This calculator gives you the total — the math. The template is the formatted document with your business name, license number, project description, client info, payment schedule, scope of work, and signature block. Use the calculator to validate your numbers; use the template to send the actual estimate to the client.

How accurate should my materials estimate be?

A 10–15% contingency on materials helps cover price fluctuations, short-shipped deliveries, and items that get added during a job. Putting the contingency directly in the materials line is more durable than relying on the markup to absorb overage.

Do I need a separate change order for scope additions?

Yes. Once the estimate is signed, any additional work needs a written change order with its own cost. Verbal "while you're here" requests are how contractors lose money. Use a change order form, document the cost, get a signature, then proceed. See the change order guide linked below.