What does the company have to bill this month just to survive?
Break-even is the revenue number underneath every other number in your business. It is what you have to bill before a single dollar is yours. Put in what goes out every month whether or not you sell a job, put in your own gross margin, and this works out the revenue you have to bill per month, per week, per working day, and per job. Every figure below is arithmetic on the figures you type. Nothing is assumed for you.
Why there is no suggested overhead figure or target margin on this page
Plenty of places will tell you what a contractor's overhead “should” be, or what margin your trade “typically” runs. We will not, because we have not verified such a figure and we are not going to invent one. Your fixed costs are whatever actually leaves your account, and your gross margin comes from your own finished jobs. Every field here ships empty on purpose, and everything printed is arithmetic on what you supplied.
What these terms mean
Definitions only. Every one of these is a concept, not a number — the figures are yours to supply.
Fixed cost versus job cost, and why the split matters
A job cost only happens because you sold that job: the material, the hours on the truck, the sub, the permit, the dump run. Sell nothing and it does not occur. A fixed cost goes out on the first of the month whether the phone rang or not: the truck payment, the insurance, the yard, the software, the bookkeeper, and what you have to take home.
Break-even is entirely about that second group. Your gross margin already accounts for the first group, which is why job materials and job labor must not be typed into the fields above — entering them in both places counts them twice and inflates the answer.
The awkward ones sit between. A truck payment is fixed; the fuel burned driving to a job is closer to a job cost. Put it wherever you already treat it in your own books, and treat it the same way every month. Consistency matters more here than precision.
Why break-even needs your gross margin, not just your costs
A common mistake is to add up the monthly fixed costs and call that the number to bill. It is not, and it is not close. If you bill a dollar, most of that dollar immediately goes back out as the material and labor that dollar's job consumed. Only the gross-profit share is left to put against rent, insurance, and your own pay.
So the revenue you have to bill is your fixed costs divided by your gross margin, expressed as a decimal. That is the whole calculation on this page. A business with the same fixed costs and a thinner margin has to bill a great deal more revenue to reach the same place, which is why margin work and break-even work are the same job approached from two ends.
What break-even does not include
Break-even is a revenue threshold, not a cash-flow forecast and not a tax calculation. Hitting it means the month's billing covered the month's costs on paper. It says nothing about when that money arrives: a month can break even and still leave you unable to make payroll, because the invoices are sitting in someone else's accounts payable.
It is also before income taxes, and it is only as complete as the fields you filled in. Anything you left blank is a cost the business still pays — it just is not in this answer.
And it is a threshold for surviving, not a plan. Break-even is where the business stops going backwards. What you want it to make on top of that is the optional profit field above.
Why the number moves, and how often to redo it
Every one of these inputs drifts. Insurance renews higher, a truck gets added, a software price goes up, you hire, you take on a yard, your margin shifts as your mix of work changes. A break-even figure worked out once and taped to the wall is describing a company you no longer run.
Redoing it costs a few minutes. It is worth doing whenever a fixed cost changes materially, whenever you add or lose a person or a vehicle, and whenever your gross margin moves — and at minimum on a regular schedule you actually keep.
How to get your gross margin if you do not have one
Take several jobs you have already finished and been paid for — ideally a spread of the kinds of work you actually sell, not only the good ones. For each, work out what you collected and what that job cost you directly: materials, the hours at their fully burdened cost, subs, permits and disposal, equipment, and any callback you had to eat.
Gross profit is collected revenue minus those direct costs. Gross margin is that gross profit as a percent of collected revenue. Across several jobs, total the gross profit and total the collected revenue, then divide. That blended figure is the one to bring back here.
The job margin calculator does that arithmetic for one job at a time and shows the line-by-line breakdown, so you can run it on each job and blend the results yourself.