Short answer
Cleaning business profit margin is profit ÷ price. Gross margin subtracts only labour and supplies; net margin also subtracts overhead. Set the price as break-even ÷ (1 − target margin). Example: a 4 cleaner-hour job costing $136.60 prices at $210.15 for a 35% net margin, with a 50.7% gross margin and labour at 44.54% of revenue.
- Gross margin counts labour and supplies. Net margin also counts overhead. Quote the one you mean.
- Worked job: 44.54% labour, 4.76% supplies, 15.7% overhead, 35% profit. They add to 100%.
- Selling 75% of sellable hours cuts a planned 35% net margin to 29.76% on these numbers.
- Raising price 5% adds $10.51 a job; cutting time 5% adds $6.33.
- Adding 35% as a markup keeps 25.93%, not 35%.
On this page
- How to calculate cleaning business profit margin
- Cleaning business profit margin calculator
- Worked example: gross vs net margin on one clean
- Cleaning business labour cost percentage: work out your own
- Why your real net margin is lower than your quoted margin
- Raise prices 5% or clean 5% faster? What moves margin more
- Is a 40% profit margin good for a cleaning company?
- Calculator, P&L or contract spreadsheet?
- Excel formulas for cleaning profit margin
- Step-by-step
- FAQ
How to calculate cleaning business profit margin
Profit margin is profit divided by the price the customer pays. The word "margin" covers two different numbers in a cleaning business, and mixing them up is how owners think they earn more than they do.
- Gross margin = (price − labour − supplies) ÷ price. The direct cost of doing the clean.
- Net margin = (price − labour − supplies − overhead) ÷ price. What is left after insurance, vehicle, phone, software and admin too. This page's net figures are before income tax.
- Price for a target margin = break-even ÷ (1 − margin). Divide; never add the margin on top.
Search results for this question mostly quote margin ranges from surveys and software blogs. A range cannot tell you your own margin. Your price, hours and overhead can, and the arithmetic below shows every step so you can swap in your own numbers.
Assumptions used throughout (replace every one): an $18 wage with 30% burden ($23.40 loaded); $29,040 of yearly overhead over 2 people × 220 billable days × 8 hours = 3,520 sellable hours, which is $8.25 per hour; a 35% target net margin.
Cleaning business profit margin calculator
Enter your cleaner-hours, wage, supplies and overhead; the calculator shows break-even, the price for your target margin, and what adding the same percentage as markup would bill. It opens on the 4-hour job below.
It is also on its own page as the free cleaning price calculator. To track margin across every recurring contract rather than one job, the cleaning business profit margin template shows labour as a share of your price on every contract and flags it when it goes over.
Worked example: gross vs net margin on one clean
A 4 cleaner-hour job with $10 of supplies breaks even at $136.60 and prices at $210.15. Its net margin is 35% and its gross margin is 50.7%.
Worked example: One cleaning job: 4 cleaner-hours, $10 of supplies (assumed inputs)
| Item | Value |
|---|---|
| Workers (input) | 1 |
| Hourly wage paid (input) | $18.00 |
| Labour burden % (input) | 30% |
| Materials (input) | $10.00 |
| Overhead for the year (input) | $29,040.00 |
| People in the field (input) | 2 |
| Billable days a year (input) | 220 |
| Target margin % (input) | 35% |
| Jobs a week (input) | 15 |
| Hours on the job (input) | 4 |
| Loaded labour rate (per hour) | $23.40 |
| Crew-hours | 4 |
| Labour cost | $93.60 |
| Overhead per sellable hour | $8.25 |
| Overhead share | $33.00 |
| Break-even cost | $136.60 |
| Price to quote | $210.15 |
| Profit on the job | $73.55 |
| Price if you MARK UP instead | $184.41 |
| Margin you actually keep with markup | 25.93% |
| Lost per job by marking up | $25.74 |
| Lost per year by marking up | $20,080.20 |
Computed with the same formulas as the free calculators on this site. Change any input in the calculator above to see your own numbers.
Check it: labour 4 × $23.40 = $93.60. Overhead 4 × $8.25 = $33.00. Break-even $93.60 + $10 + $33.00 = $136.60. Price $136.60 ÷ 0.65 = $210.15. Profit $73.55.
| Line | Amount | Share of price |
|---|---|---|
| Labour (loaded) | $93.60 | 44.54% |
| Supplies | $10.00 | 4.76% |
| Gross profit | $106.55 | 50.7% (gross margin) |
| Overhead share | $33.00 | 15.7% |
| Net profit | $73.55 | 35% (net margin) |
Someone who says "my margin is 50%" may mean gross. After overhead, the same job keeps 35%. Both are true; only one pays for your van.
Cleaning business labour cost percentage: work out your own
Labour percentage is loaded labour ÷ price. On the worked job it is $93.60 ÷ $210.15 = 44.54%. It is the biggest line in the business, so it is the first number to watch.
Work it backwards to see what a labour share implies. At a $23.40 loaded rate, a 20% labour share means billing $117 per cleaner-hour. At the $48.69 per cleaner-hour this page's costs need for a 35% margin (before supplies), labour is 48.06% of the price. So a very low labour share usually means very high prices or a wage figure that leaves out burden.
| Price per cleaner-hour | Labour share | Working |
|---|---|---|
| $48.69 | 48.06% | $23.40 ÷ $48.69 |
| $52.54 | 44.54% | worked job, $210.15 ÷ 4 hours, incl. supplies |
| $117.00 | 20% | $23.40 ÷ 0.20 |
Use the burdened rate, not the wage. $18 against $52.54 looks like 34%; the true figure is 44.54%. The house cleaning pricing guide prices a residential clean the same way, loaded rate first.
Why your real net margin is lower than your quoted margin
Every quote assumes all 3,520 sellable hours get sold. Sell fewer and overhead is not fully recovered, so net margin falls even though every job was priced at 35%.
Worked example: A year at that price, every sellable hour sold: 880 jobs (assumed inputs)
| Item | Value |
|---|---|
| Tax reserve % (input) | 0% |
| Revenue (input) | $184,932.00 |
| Cost of goods / direct costs (input) | $91,168.00 |
| Operating expenses (input) | $29,040.00 |
| Gross profit | $93,764.00 |
| Gross margin | 50.7% |
| Operating profit | $64,724.00 |
| Operating margin | 35% |
| Tax | $0.00 |
| Net profit | $64,724.00 |
| Net margin | 35% |
Computed with the same formulas as the free calculators on this site. Change any input in the calculator above to see your own numbers.
At 880 four-hour jobs a year, revenue is $184,932 and net profit $64,724, a 35% net margin. Now sell only 75% of the hours, 660 jobs, with labour paid only for hours worked:
Worked example: The same year with 75% of sellable hours sold: 660 jobs (assumed inputs)
| Item | Value |
|---|---|
| Tax reserve % (input) | 0% |
| Revenue (input) | $138,699.00 |
| Cost of goods / direct costs (input) | $68,376.00 |
| Operating expenses (input) | $29,040.00 |
| Gross profit | $70,323.00 |
| Gross margin | 50.7% |
| Operating profit | $41,283.00 |
| Operating margin | 29.76% |
| Tax | $0.00 |
| Net profit | $41,283.00 |
| Net margin | 29.76% |
Computed with the same formulas as the free calculators on this site. Change any input in the calculator above to see your own numbers.
Gross margin stays at 50.7%, but net margin falls to 29.76%. The overhead charged into 660 jobs is $21,780; the bills are still $29,040, so $7,260 is uncovered. Add the $16,181 of profit on the 220 jobs that never happened and the year is $23,441 short of plan.
Two fixes: set the "billable days" input to the days you actually sell, which raises overhead per hour honestly, or fill the schedule. Either way, compare the plan with a real profit and loss statement each month.
Cleaning Contract Pricing Calculator
The spreadsheet version of this guide for Excel & Google Sheets: type your numbers into the highlighted cells and the formulas do the rest. One-time $39, no subscription, instant download.
See the Cleaning Contract Pricing Calculator →Buy now — $39Instant access by email after checkout via Payhip. Want to try the maths first? Use the free calculator — no signup.
Raise prices 5% or clean 5% faster? What moves margin more
On this job, a 5% price rise adds more profit than a 5% time cut, and both lift net margin to about 38%.
| Change | Price | Break-even | Profit per job | Net margin | Extra a year (880 jobs) |
|---|---|---|---|---|---|
| None | $210.15 | $136.60 | $73.55 | 35% | none |
| Price + 5% | $220.66 | $136.60 | $84.06 | 38.09% | $9,248.80 |
| Time − 5% (3.8 hours) | $210.15 | $130.27 | $79.88 | 38.01% | $5,570.40 |
The price rise goes straight to profit. The time cut only saves the labour and overhead of 0.2 hours, unless you sell the freed hours to another customer. That is why pricing is usually the first lever to check, and why a stated price increase at contract renewal matters.
Is a 40% profit margin good for a cleaning company?
Any target margin is reachable on paper; the question is whether the price still wins work. At 40%, the worked job prices at $227.67, which is $17.52 more than at 35%.
Is $50 an hour for cleaning good? On this page's costs, break-even is $31.65 per cleaner-hour and a 35% margin needs $48.69. At $50 an hour, before supplies, the net margin is 36.7%. With a higher wage or more overhead, $50 could sit near break-even.
How much should you charge for 8 hours of cleaning? Eight cleaner-hours with $10 of supplies break even at $263.20 and price at $404.92 for a 35% margin on these assumptions.
The markup trap: add 35% to break-even and the job bills $184.41 and keeps 25.93%. That is $25.74 a job, $20,080.20 a year at 15 jobs a week. The markup vs margin guide has a conversion chart.
Calculator, P&L or contract spreadsheet?
Use the free calculator to price a job at a target margin, a P&L to see the margin you actually made, and a contract sheet if most of your revenue is recurring.
| Option | Cost | Answers |
|---|---|---|
| Free cleaning price calculator | Free, no signup | What to charge one job for a target margin |
| Free Job Pricing Starter | Free | Loaded labour, overhead, break-even and price on one sheet, and what markup pricing costs you per job |
| Cleaning Contract Pricing Calculator | $39 one-time | Break-even per visit and per month, labour-share check, "am I underpricing?" check, contract log |
| Field-service app | Monthly subscription | Scheduling and invoicing |
The cleaning contract pricing calculator includes an "am I underpricing?" check: type the monthly figure you were about to put on the proposal and get the twelve-month answer in dollars. Its contract log and dashboard track monthly recurring revenue, win rate and annual value won.
Excel formulas for cleaning profit margin
Layout: B2 = price, B3 = loaded labour, B4 = supplies, B5 = overhead share, B6 = target margin %, B7 = break-even.
Gross margin %
=(B2-B3-B4)/B2B2 = price, B3 = loaded labour, B4 = supplies. Format as %.
Net margin %
=(B2-B3-B4-B5)/B2B5 = overhead share for the job. Before income tax.
Labour share of revenue
=B3/B2Use loaded labour, not the wage.
Price for a target margin
=B7/(1-B6)B7 = break-even, B6 = target margin as a percent. Not B7*(1+B6).
Put these next to each contract and sort by net margin. The lowest rows are the ones to reprice at renewal. For recurring contract pricing see the commercial cleaning bidding guide.
Step-by-step: Cleaning Business Profit Margin: Gross, Net and Labour Share, Worked Out
- Load the wage. Multiply the wage by (1 + burden %) for payroll tax, workers' comp, insurance and paid time off.
- Find overhead per hour. Divide yearly overhead by sellable hours: people × billable days × 8.
- Find break-even. Add loaded labour, supplies and cleaner-hours × overhead per hour.
- Price for the margin. Divide break-even by (1 − target margin). For 35%, divide by 0.65.
- Check gross, net and labour share. Gross = price − labour − supplies. Net = gross − overhead. Labour share = loaded labour ÷ price.
- Compare with actuals. Each month, compare planned margin with your profit and loss, and count unsold hours.
Skip the setup: Cleaning Contract Pricing Calculator
The spreadsheet version of this guide for Excel & Google Sheets: type your numbers into the highlighted cells and the formulas do the rest. One-time $39, no subscription, instant download.
See the Cleaning Contract Pricing Calculator →Buy now — $39Instant access by email after checkout via Payhip. Want to try the maths first? Use the free calculator — no signup.
Frequently asked questions
What is a good profit margin for a cleaning business?
One you set on purpose and actually hit after overhead. Price each job as break-even ÷ (1 − target margin), then check your profit and loss. On this page's assumptions a 35% target net margin gives a 50.7% gross margin, but selling only 75% of hours drops net to 29.76%.
How do you calculate profit margin for a cleaning business?
Divide profit by price. Gross margin uses price minus labour and supplies; net margin also subtracts overhead. In the worked job, $73.55 of net profit on a $210.15 price is a 35% net margin, and $106.55 of gross profit is 50.7%.
What labour cost percentage should a cleaning business have?
Work it out as loaded labour ÷ price. In this page's example it is 44.54%. A much lower figure usually means a very high hourly price or a wage figure that leaves out burden. Always use the loaded rate, not the wage.
Is a 20% labour cost good for cleaning?
It is hard to reach. At a $23.40 loaded rate, a 20% labour share means billing $117 per cleaner-hour. If your share looks that low, check whether you used the wage instead of the loaded rate, or left out your own hours.
Is a 40% profit margin good?
It is a choice you can price for. On this page's costs, a 4 cleaner-hour job prices at $227.67 for a 40% margin versus $210.15 for 35%. Whether the market pays it is a local question you test with quotes.
Is $50 an hour for cleaning good?
It clears this page's costs: break-even is $31.65 per cleaner-hour and a 35% margin needs $48.69, before supplies. At $50 the net margin is 36.7%. With a higher wage or more overhead, recompute before relying on it.
How much should I charge for 8 hours of cleaning?
Eight cleaner-hours with $10 of supplies break even at $263.20 and price at $404.92 for a 35% margin, on an $18 wage, 30% burden and $8.25 of overhead per hour. Replace those inputs with yours in the free calculator.
How profitable is a cleaning business?
As profitable as its prices and sold hours allow. On this page's assumptions, two people selling every sellable hour at a 35% margin clear $64,724 before tax; at 75% of hours sold, $41,283. Owner pay is inside labour only if you are on the payroll.
I'm not a contractor, landlord or accountant. I build the pricing maths, and every number on this page shows its working so you can check it instead of trusting it. Watch the breakdowns on YouTube →