Bid Check Calculator
Reviewed by Gerald G., founder & reviewing editor of CalcAuthority — journeyman cabinet installer, former subcontractor, and former contracting business owner who operated with 18 employees. The framing is from the field; every number comes from the stated formula.
The most expensive minute in contracting is the one where a bid goes out unchecked. This calculator is the pre-flight inspection: give it the price you are about to quote and the job's real inputs — labor hours at a burdened rate, materials, subs, and your overhead share — and it tells you what the job is projected to earn, in dollars and margin, before the customer ever sees the number. It answers operator question three: can I afford this decision? Built to work with the Labor Burden Calculator and the How to Price a Job guide.
How It Works
The calculator rebuilds the job's cost from the bottom: labor as hours × burdened rate, then materials, then subs and other direct costs, then the overhead share this job must carry (a percentage of the bid price). Whatever is left of the bid price is projected profit — and dividing it by the price gives the margin, the number that lets you compare a $5,000 job against a $50,000 one honestly.
The discipline is in what you feed it. Use raw wages instead of burdened rates and the profit inflates by thousands. Skip the overhead line and every job looks great while the company somehow ends the year broke. The Underbidding Trap guide covers how these two omissions compound.
Worked Examples
Example 1 — the bid that only looks fine. Bid price $18,000. Labor: 220 hours × $42 burdened = $9,240. Materials $5,400. Subs $1,200. Overhead 12% of bid = $2,160. Total cost = $9,240 + $5,400 + $1,200 + $2,160 = $18,000. Projected profit: $0 — exactly break-even. On wages alone this bid would have looked comfortably profitable; at burdened rates with overhead counted, it earns nothing and one rain delay puts it underwater.
Example 2 — a healthy bid. Bid price $24,500. Labor: 260 hours × $40 = $10,400. Materials $6,200. Subs $800. Overhead 10% = $2,450. Total cost $19,850. Projected profit = $4,650, a 19% margin. This job can absorb a surprise and still pay the company.
What This Result Means
The projected margin is the job's cushion. It has to absorb everything that goes mildly wrong — an extra material run, a slow day, a punch list — before anything reaches the company as profit. A projected margin near zero does not mean "we broke even"; it means any friction turns the job into a loss. Dollars matter too: a 25% margin on a $2,000 job is $500 — fine as filler, not as a business.
Reading the Result
- Negative margin: the bid loses money on paper — and jobs rarely beat their paper. Reprice or decline.
- 0–8%: thin. Acceptable only with a strategic reason (anchor client, slow season, foot in a new market) and never as the default.
- 8–15%: workable — the job pays its way and contributes real profit.
- Above 15%: healthy. Protect the estimating discipline that produced it.
Bands are editorial heuristics for reading the output; they reflect how much ordinary job friction a margin can absorb, not a survey of trade profitability. Calibrate to your own history: your last ten jobs' actual margins are the benchmark that matters.
When to Use This Calculator
Run every bid through this before it leaves your office — but especially:
- Bids under time pressure — rushed numbers are where wage/burden substitutions sneak in.
- Bids you sharpened to win — after each discount, re-run it; know whether you cut profit or crossed into loss.
- Negotiated changes — scope moved, price didn't? Check what the margin became.
- Post-mortems — after the job closes, compare projected vs. actual with the Job Profit Margin Calculator; the gap teaches you where your estimating leaks.
Limitations
- A projection, not a guarantee — it is exactly as accurate as your hour and material estimates.
- Overhead as a flat percentage of price is a simplification; unusually large jobs may warrant a tailored allocation.
- Does not model change orders, retainage, payment delays, or financing costs.
- Assumes materials prices hold between bid and build; on volatile materials, add an allowance line to your inputs.
Frequently Asked Questions
The check says my bid is break-even but I always add contingency — am I fine?
Contingency inside your cost lines protects the cost estimate; it does not create profit. If the bid is break-even with contingency included, the best case is that you keep the contingency as thin profit — and the normal case is that the job consumes it. Break-even at bid time means the business earns nothing for taking all the risk. Reprice.
Why does the calculator take overhead as a percentage of the bid instead of a fixed amount?
Because that is how overhead recovery has to work across a year: total overhead ÷ total revenue = the share every dollar of revenue must contribute. Applying it per-job as a percentage of price keeps big jobs and small jobs each carrying their proportional weight. If you prefer overhead per labor hour, compute it with the Overhead Recovery Calculator and fold it into your burdened rate instead — just do not do both.
What margin should I be targeting?
There is no universal number — it depends on your trade, risk, and volume. The useful discipline is a floor you never bid below (many operators set 8–10% after overhead) and a target you build bids toward. Set them from your own books: enough margin that a normal year of small surprises still ends with the company profitable.