Project Profitability Calculator
Calculate project profit and margin from revenue, labor, contractor, other direct cost and allocated overhead.
Measure project profitability
Combine direct delivery costs and allocated overhead, then compare them with project revenue.
How the calculation works
Internal labor cost = labor hours × loaded internal cost per hour. Total project cost adds contractor/vendor cost, other direct cost and allocated overhead. Project profit = revenue − total cost, and margin = profit ÷ revenue.
How to use the result
Use project profitability to compare scopes, clients and delivery models. Time tracking quality is important because unrecorded internal hours can make service projects look more profitable than they are.
Assumptions and limitations
Overhead allocation is a management assumption, and revenue timing may differ from cash collection. The model does not include tax, financing cost or future support obligations unless you add them to the cost inputs.
Example
A project can have positive cash inflow but poor economic profit if internal labor is treated as free; using a loaded hourly cost helps expose that consumption of capacity.