Work out the true cost of making and selling your product, including a fair share of your rent, utilities and other overheads, then see your profit margin, your break-even price, and the price you need to charge to hit your target margin.
Tell us about the job or production run this calculation covers.
Costs that go directly into producing one unit or job.
Your overheads: costs that keep the business running whether or not this specific job happens.
Monthly expenses × 12 ÷ days per year = daily indirect cost. Daily indirect cost ÷ working hours per day = hourly indirect cost. Hourly indirect cost × premises hours used = indirect cost allocated to the job.
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Talk To Us About Your PricingProfit margin is profit as a percentage of your selling price. Markup on cost is profit as a percentage of your production cost. The two numbers are related but not the same: a 50% markup does not equal a 50% margin.
Every hour your premises are in use costs you rent, rates, utilities and other overheads, whether or not you're actively producing. This calculator spreads those monthly costs across your working hours and allocates a fair share to each job, so your pricing accounts for overheads and not just materials and labour.
It's the price at which your revenue exactly covers your total production cost (direct costs plus your allocated share of overheads), with zero profit. Selling below this price means making a loss on the job.
Labour cost is what you pay someone for their time. Premises hours used is how long the job occupies your workshop or business premises, which is what drives how much rent, utilities and other overheads should be allocated to it.
We recommend reviewing your pricing at least once or twice a year, or whenever your costs change significantly, for example when supplier prices rise or your overheads increase.