Restoration Job Profit Calculator

The restoration industry has a persistent "profit illusion" problem. A water mitigation job or a fire-and-smoke recon can look healthy on gross margin and still lose money once overhead, collection friction, and after-hours labor are honestly allocated. Operator interviews and RIA commentary both suggest the legacy "10 & 10" (10% overhead, 10% profit) rule dramatically understates real overhead for a modern mid-market restoration shop. Our benchmark comparison panel uses 28–40% as a commonly cited overhead band, and the calculator defaults to 34% — still a starting point, not a target.

The calculator above deliberately separates gross margin (revenue minus direct job costs), contribution margin (the same number, reframed as the contribution to fixed overhead), and net margin (contribution minus that job's share of overhead). The gap between those three numbers is where "busy but broke" lives. When your GM says "we had our best month ever," but the bank account says otherwise, the three-margin split is usually the reason.

Gross margin is revenue minus variable direct costs — burdened labor, equipment, materials, subs with markup, disposal, travel, permits. On a water mitigation job, gross margin typically runs 35–55%. Fire and smoke cleanup is lower because of PPE, contents handling, disposal fees, and the higher proportion of specialist hours. Reconstruction is lower still because of sub-heavy cost structures and carrier price-list constraints.

Contribution margin is gross margin viewed through a different lens: it's the dollar amount each job contributes toward fixed overhead. If your office, fleet, software, admin, compliance, and owner comp total $90,000/month, you need jobs whose summed contribution clears that $90k before you've earned any profit at all. The Annual Volume Projection panel above models this directly — drag the "Fixed monthly overhead" slider to see how many jobs of this type you'd need per month to break even at the shop level.

Net margin is contribution minus the job's allocated share of overhead. Two allocation methods are common: percent-of-revenue (34% is a widely-discussed starting benchmark) or per-labor-hour (e.g. $45/hr loaded onto every billable labor hour). Which you pick matters less than matching it to how you actually track overhead in your P&L. The calculator supports both.

The legacy Xactimate "10 & 10" (10% overhead + 10% profit markup) was calibrated for a much leaner contractor model — before carrier audit teams, before specialized software stacks, before rising workers comp insurance, and before the compliance burden of IICRC re-certification, EPA lead/RRP, and state licensing. Modern mid-market restoration shops that honestly price their overhead usually land between 28% and 40% of revenue, not 10%. The SBA's employee cost guidance suggests burden alone can run 1.25–1.4× base wages, which — combined with the other overhead categories — puts total fixed cost well above the legacy assumption.

The practical consequence: if you're using a 10% overhead loading in your estimates when your actual fixed cost is closer to 34%, you're systematically underestimating what price you need to charge to break even. The calculator forces this number to be explicit and gives you a benchmark comparison so you can see instantly whether your assumption is inside or outside the commonly-cited band.

When a technician's paystub says $28/hour, your true cost to the business is usually $35–$39/hour. The gap is labor burden: employer FICA and FUTA, state unemployment, workers comp (which in restoration is meaningfully higher than in general trades), general liability, health and dental, retirement match, PTO, training, and IICRC re-certification. SBA commentary puts total employee cost at 1.25–1.4× base salary. In restoration specifically, the higher end of that range (1.35–1.45×) is common because of the elevated workers comp class code.

The calculator above applies a single burden multiplier across all three labor roles. If you're being honest about your numbers, 1.30 is a reasonable floor and 1.45 is a reasonable ceiling. Setting it below 1.05 triggers a warning in the calculator — the math would imply you have essentially zero employer costs, which doesn't match any legally-operating restoration business in the US.

After-hours work is its own layer. The FLSA overtime rules set a 1.5× floor for non-exempt hours above 40/week, but actual after-hours pricing policy varies by shop. Some use 1.5× across the board, others use 1.25× for 4pm–10pm and 2.0× for overnight emergency dispatch. Document your policy internally and apply it consistently — the calculator's after-hours multiplier defaults to 1.5× to match the FLSA baseline.

A restoration job can be profitable on the P&L and still crush your cash position. The reason: you're paying labor weekly, subs at NET-30, materials COD, and equipment rentals weekly — while the carrier is paying you 45, 60, 75, or sometimes 90+ days after you send the invoice. Add mortgage endorsement when it's required and the gap gets longer. The Cash Flow Timeline panel above models this directly: drag the payment-delay slider from 45 days to 90 days and watch the financing cost move.

The most common failure mode for a mid-market restoration contractor isn't bad pricing — it's good pricing paired with an aging report that's too long. When your receivables balloon and your line of credit maxes out, you can be holding a portfolio of profitable jobs and still miss payroll. This is why a calculator that only shows the P&L view isn't enough. You need to see the cash shape alongside the margin shape.