The arithmetic that separates busy contractors from profitable ones — burdened labor rates, overhead recovery percentages, markup versus margin, and bid presentation.
Marking a $10,000 cost up by 15% yields $11,500 and a 13.04% margin, not 15%. To earn a true 15% net margin, divide cost by (1 − 0.15) and charge $11,765. Estimators who multiply instead of divide quietly give away one to three points of profit on every job they win.
Base wage is only part of what an hour of crew time costs. Add payroll taxes (roughly 8 to 10%), workers compensation (highly trade- and state-dependent, often 6 to 15% for landscape classifications), general liability, PTO and holidays, training, and non-billable shop time. Total burden lands between 25% and 40% of base wage for most companies.
Overhead is every dollar that does not attach to a job: office, sales, estimating, trucks not on site, software, marketing, owner salary. Divide last year's overhead by last year's revenue to get your recovery percentage. Most residential design-build firms land between 15% and 25%. Apply it to direct cost on every bid, then add profit on top of that. Profit is not overhead, and a bid that conflates them is a bid that funds the office instead of the business.
The Project Cost and Bid Builder on this site runs exactly this sequence, so you can vary markup, overhead and margin and watch the bid price and net profit dollars move together.