What Is Gross Profit per Hour?

By BRIX Editorial Team · Updated October 12, 2026

Gross profit per hour is the gross profit a job earns for each labor hour it takes: revenue minus direct job costs, divided by total crew hours including drive time. A $450 repair with $144 of direct cost that takes two hours earns $153 per hour. If that beats your overhead per hour, the job pays its way.

Key takeaways

Gross profit per hour = (Revenue − Direct job costs) ÷ Labor hours on the job.
It puts a two-hour repair and a two-day install on the same scale, which margin percentage and ticket size can't do.
Compare it with overhead per field hour. Below that line, the job lost money even if its margin looked fine.
Count every paid hour tied to the job: drive time, supply-house runs and second trips included.
Labor-heavy trades such as landscaping and cleaning often use gross profit per man-hour as their main pricing check.

How does gross profit per hour work?

Gross profit per hour works by dividing what a job left you after direct costs by how long your people spent on it. Time is the one thing a trades business can't make more of, so this tells you which work makes the best use of it. It answers a question gross margin can't: a 68% margin on a small repair and a 42% margin on a big install, which is the better use of a crew's day?

Gross profit per hour

GP per hour = (Revenue − Direct job costs) ÷ Labor hours

Revenue: what you billed for the job, including change orders, before sales tax
Direct job costs: materials, burdened labor, subcontractors, rentals, permits and disposal
Labor hours: total paid crew hours on the job: two techs for 9 hours is 18 hours. Include drive time

How do you know if a job paid its way?

A job paid its way if its gross profit per hour is higher than your overhead per field hour. Overhead per field hour is your yearly overhead divided by the total paid field hours your crews work in a year. Every hour of field time has to carry that much overhead before it makes any profit.

Overhead per field hour

Overhead per field hour = Annual overhead ÷ Annual paid field labor hours

Annual overhead: rent, office staff, trucks, insurance, software, marketing, owner's management pay
Paid field labor hours: every hour your field crew is paid for in a year

Gross profit per hour by trade

Gross profit per hour is most useful in trades where labor is the main cost and job lengths vary. Here's how each trade tends to use it.

How each trade uses gross profit per hour
Trade	Jobs to compare	What it usually reveals
HVAC	Repairs vs. tune-ups vs. replacements	Replacements often earn more per hour than their margin suggests; tune-ups earn less and need to lead to repairs or plans
Plumbing	Drain calls vs. water heaters vs. repipes	Small jobs with long drives sink the hourly number; second trips for parts are the main leak
Electrical	Service calls vs. panel upgrades vs. new construction	Bid work with tight margins can still earn well per hour if crews run efficiently; old-house work can't
Roofing	Repairs vs. replacements	Small repairs tie up a crew and a truck for little gross profit; many roofers set a minimum price
Landscaping	Maintenance routes vs. installs vs. enhancements	Underpriced routes and installs show up immediately; many landscapers price installs from a target gross profit per man-hour
Cleaning	Recurring vs. deep cleans vs. move-outs	Homes that run long against the quote drop below the overhead line fast

Gross profit per hour vs. revenue per hour and gross profit per truck

Revenue per hour ignores materials, so equipment-heavy jobs look great even when the gear is passed through at a thin markup. Gross profit per hour corrects that.
Gross profit per truck (per day or per year) adds up a crew's jobs. It's the same idea at the truck level, useful for comparing crews or deciding whether to add a truck. Try the gross profit per truck calculator.
Gross margin is a percentage of revenue. It tells you whether prices cover costs, but not whether the time was well spent.
[Contribution margin](/learn/contribution-margin) also subtracts variable costs like card fees and commissions, so it's the stricter version for discount decisions.

How do you raise gross profit per hour?

You raise gross profit per hour by earning more per job or by spending fewer hours on it. Most shops find faster gains in the hours: drive time, second trips and callbacks are paid hours that earn nothing.

Price by task, not by clock. Flat-rate pricing means a faster tech earns more per hour instead of billing less.
Tighten routes. Fewer miles between stops is more billable time. See route optimization.
Stock trucks for the common jobs. Every supply-house run is an unpaid hour.
Fix it the first time. Callbacks add hours with no revenue. Track your callback rate.
Set minimums. A minimum charge stops tiny jobs from eating a crew's day.
Raise utilization. More of each paid hour spent on jobs lifts every number. See technician utilization.

Common mistakes

Leaving out drive time. It's paid and it's for the job. Excluding it makes small jobs look better than they are.
Counting tech-hours wrong. Two techs for four hours is eight labor hours, not four.
Using unburdened wages in direct cost. Use burdened labor so the number reflects real cost.
Comparing to revenue per hour targets. Different metric, different benchmark.
Judging maintenance visits alone. A low hourly number on tune-ups can be worth it if they lead to repairs and replacements. Look at customer lifetime value too.

Frequently asked questions

How do you calculate gross profit per hour?

Subtract the job's direct costs (materials, burdened labor, subs, rentals, permits) from its revenue, then divide by the total labor hours on the job, counting every crew member's hours and drive time. A $450 job with $144 of direct cost and 2 hours of labor earns $153 of gross profit per hour.

What is gross profit per man-hour?

It's the same metric: gross profit divided by the total hours worked by all crew members on the job. The term is common in landscaping and construction, where crews of several people work the same job.

What's a good gross profit per hour?

A good number is one that clears your overhead per field hour plus your profit target. Divide yearly overhead by yearly paid field hours to find the floor. A shop with $480,000 of overhead and 14,400 field hours needs more than $33.33 per hour just to break even on each job.

Should labor cost be subtracted before dividing by hours?

Yes, in the standard version. Subtract burdened labor along with materials and other direct costs, then divide by hours. Some shops use a variant that subtracts only materials; that's fine if you use it consistently and set your target to match.

Is gross profit per hour better than gross margin?

They answer different questions. Gross margin tells you whether prices cover direct costs. Gross profit per hour tells you which jobs earn the most for the time your crews spend. Use both: margin to price, gross profit per hour to choose and schedule work.

Why does my high-margin work earn less per hour?

Small, high-margin jobs often carry a lot of drive time and setup for little revenue. Two short repairs across town can earn less per hour than one longer install with a lower margin. Minimum charges, tighter routing and flat-rate pricing help.