Project Profitability Calculator
See whether a fixed-fee project actually made money after labour, subcontractors and expenses — with the effective hourly rate it earned.
How it works
Labour = hours × internal cost · Total cost = labour + direct expenses · Profit = fee − total cost · Margin % = profit ÷ fee × 100
A fixed-fee project is only profitable if the fee beats what it truly costs to deliver — your loaded labour plus any subcontractors and pass-through expenses. Using your internal cost per hour (salary and overhead), not your bill rate, keeps the comparison honest. The effective hourly rate divides the fee by hours actually spent: it reveals scope creep instantly, because a fee that looked generous can slip below your target rate once the hours pile up.
Worked example
A $12,000 project took 90 hours at a $55 internal cost ($4,950) plus $2,500 of subcontractors, so total cost is $7,450. Profit is $4,550 — a 37.9% margin, and the effective rate is 12,000 ÷ 90 ≈ $133 per hour.
Frequently asked questions
What is internal cost per hour?
It is your loaded labour cost — salary or draw plus a share of overhead — not the rate you bill clients. Comparing the fee against internal cost shows the real profit; comparing it against your bill rate would double-count profit.
Why track the effective hourly rate?
A fixed fee hides how the project is really going. Dividing the fee by hours spent converts it back to an hourly rate you can compare to your target. If it drops below your floor, scope crept or the estimate was too low.
Should overhead be in the cost?
Yes, at least roughly. If your internal cost per hour already loads in rent, software and admin, the profit figure is meaningful. If it is bare wages only, treat the margin as optimistic.
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Educational estimate, not financial advice.