Everhour tracks project budgets and costs while this page separates first-layer profit from final business profit.
Estimate total cost by combining labor hours, materials, and overhead. Know your numbers before you send the proposal.
Indirect costs on top of labor + materials
The calculator gives you the number — Everhour takes it from there.
One click and you're timing. Start a timer, add an entry, edit the details. This is exactly how it feels in Everhour.
Set a budget, assign rates, and get alerted before you're over.
Measurement
Track your budget through time or costs
Every report you need — configured your way, always up to date.
Tracked hours flow straight into a polished invoice — no copy-paste, no manual math.
Gross profit answers whether the core sale or project covers its direct production or delivery cost. For U.S. small-business tax reporting, gross profit equals net receipts after returns and allowances minus cost of goods sold. Most service businesses with no merchandise income factor use net receipts as gross profit because they do not calculate inventory-based COGS.
Net profit answers whether the business made money after business expenses. For a U.S. sole proprietor, net profit or loss on Schedule C flows to Schedule 1 of Form 1040. That number can affect income tax and self-employment tax, which generally applies when net earnings from self-employment are $400 or more.
Start with revenue or net receipts, then subtract the cost layer that belongs in COGS. Manufacturers can include direct labor, materials, freight-in, and allocable manufacturing overhead such as factory rent, utilities, depreciation, maintenance, and supervision. When merchandise production, purchase, or sale is an income-producing factor, U.S. filers generally use beginning inventory plus purchases, labor, materials, and other costs minus ending inventory.
For example, a project has $40,000 in net receipts, $15,000 in COGS, and $9,000 in operating expenses. Gross profit is $25,000, calculated as $40,000 minus $15,000. Net profit is $16,000, calculated as $25,000 minus $9,000. Gross margin is 62.5% of net receipts, while net margin is 40% of net receipts.
Gross profit and net profit answer different management questions. A product line can show strong gross profit and still produce weak net profit after salaries, software, rent, insurance, advertising, and professional fees. A service project can look profitable at the receipt level and still miss the target once nonbillable labor and project expenses land below gross profit.
Sales tax also needs careful treatment in U.S. calculations. The United States does not have a federal VAT or national sales tax. If a seller must collect state or local taxes imposed on the buyer and remit them to the government, those collections generally are not included in gross receipts or sales. Taxes imposed on the seller and collected from the buyer are included in gross receipts.
A one-off calculator is enough when you need a quick comparison for one project, one product, or one pricing scenario. It gives a clear read on the gap between direct cost recovery and after-expense profit. Keep the inputs narrow and label each cost as COGS, operating expense, or excluded tax collection.
A managed workflow becomes necessary when profitability changes every week. Time entries, billable rates, nonbillable tasks, expenses, budget limits, and approvals all change the final result. Everhour Project Budgeting tracks time and money budgets in real time, supports recurring budget periods, and can include or exclude expenses from fee budgets so margin drift appears before the project closes.
This content is for general information only, may not be fully up to date, and is provided without any warranty or liability.
High Performer
G2
Summer 2026
Best Ease Of Use
Capterra
Summer 2026
Rated in the top time trackers across G2, Capterra, and TrustRadius — with consistent praise for ease of use, integrations, and support.
Use gross profit for the first pricing pass because it shows whether the sale covers direct delivery cost. Use net profit for the final decision because rent, admin payroll, software, insurance, and other business expenses reduce what the business keeps. A price that hits gross margin can still fail the net-profit test.
Gross profit only subtracts COGS from net receipts. Net profit subtracts the remaining business expenses after that point. A business with $25,000 in gross profit and $28,000 in operating expenses has a $3,000 net loss even though the direct cost of the sale was covered.
EBITDA and net profit are different layers. EBITDA excludes interest, taxes, depreciation, and amortization. Net profit comes after more deductions. EBITDA can help compare operating performance, but it does not replace net profit for owner income, tax planning, or cash that remains after all recognized expenses.
Owner pay depends on business structure and the purpose of the calculation. Payroll paid to an owner-employee can be a business expense before net profit. Sole proprietor draws are not wages and do not reduce Schedule C net profit. For management planning, separate owner compensation from operating costs so the result stays readable.
Break-even is separate from gross-profit and net-profit accounting. Break-even analysis uses fixed costs divided by contribution margin per unit, or fixed costs divided by the contribution-margin ratio. Contribution margin requires a fixed-versus-variable cost split, while gross profit uses COGS and net profit uses business income minus business expenses.
Everhour Project Budgeting tracks project budgets in hours or money as people log time and expenses. Teams can set one-time or recurring budgets, include or exclude expenses from fee budgets, and use threshold alerts at 75%, 90%, 100%, or custom levels before profit targets slip.
Everhour Reporting can compare billable and nonbillable time, labor costs, revenue, profit margins, and actual hours against estimates by project. Reports can use columns, grouping, filters, date ranges, and exports to review profitability without rebuilding the same spreadsheet every billing cycle.
Connect budgets, time, and expenses before the final invoice. Everhour Project Budgeting gives teams real-time budget visibility, threshold alerts, and expense controls for stronger project margin management.
14-day free trial · No credit card · Cancel anytime
