Why Your Jobs Make Less Than You Quoted
The quote had a comfortable margin. The finished job barely broke even. When that keeps happening it isn't bad luck — the leak is in how the estimate was built, and you find it by putting the quote next to what the job actually cost.
Your labor costs more than the wage
This is the most common leak by far. The real cost of an hour isn't the wage — it's the wage plus payroll burden: taxes, workers' comp, insurance and benefits, which typically add 35-55% on top. A worker paid $45 an hour can cost you $62-70 fully burdened. Estimate at the wage and you underbid every single job by that gap.
Overhead has to ride on every job
The truck, the phone, the insurance, the hours spent quoting work you didn't win — overhead is real, and the jobs you do win have to cover it. A blanket markup that doesn't account for overhead makes every quote look cheaper and healthier than the job really is.
Guessing from memory repeats the same mistake
Without real cost data from past jobs, the next estimate is a guess — and the same forgotten costs get left out every time. The fix is unglamorous and it works: compare the estimate to the actual on finished jobs, and the pattern shows up quickly.
Close the loop
The estimate is a promise; the actuals are the truth. Track both on every job and you learn which kinds of work you consistently underbid — the flat roofs, the old houses, the rushed jobs — and you stop repeating them at the same wrong price.
Skip the maths on the next one
Compare what a job was estimated at against what it actually cost, find where the margin went, and track cumulative profit across every job.
See the Construction Job Cost & Profit Tracker · $59Common questions
- Why do my jobs make less than the estimate?
- Usually because labor burden was left out, overhead wasn't covered, or the estimate was guessed from memory instead of real data from past jobs.
- What is labor burden?
- The full cost of an employee beyond their wage — payroll taxes, workers' comp, insurance and benefits — often 35-55% on top of the base rate. A $45/hour wage can be $62-70/hour fully burdened.
- How do I stop underbidding?
- Estimate labor at the fully burdened cost, load a share of overhead onto every job, and compare estimate against actual on finished jobs to catch the costs you keep missing.