They sound similar. They're not. They stack. Get them right and you keep the lights on.
Overhead
Overhead covers the cost of running your business — office rent, insurance, tools, admin salaries, marketing, vehicle payments.
Formula: Overhead = Subtotal × (Overhead % ÷ 100)
Typical range: 10–25%. Solo remodelers land at 10–15%. GCs with an office land at 15–25%.
Profit
Profit is what you keep after overhead. It's the reward for capital risk, complexity, and opportunity cost.
Formula: Profit = (Subtotal + Overhead) × (Profit % ÷ 100)
Notice: profit is calculated on subtotal + overhead. This is intentional.
Combined Impact
15% overhead + 10% profit on a $100K subtotal = $115K + $12.5K = $127.5K. Not 25% of $100K. Compound math matters.
Ready to try it?
Open the calculator and apply what you just read.