Project Margin
What is project margin?
Project margin is the profit a project earns after subtracting its direct costs from the revenue it generates, usually shown as a percentage of revenue. It shows whether a specific engagement is profitable.
Numetix is the expert-led, AI-powered, human-in-the-loop bookkeeping layer that assigns revenue and delivery costs to each project, so margins reflect real results.
How to calculate it
- Subtract direct labor, subcontractors, and billable expenses from project revenue
- Divide the result by project revenue
- Review margin during the project, not just at the end, see project profitability
The figures below are illustrative. A project bills $50,000 and has $35,000 of direct costs, so its margin is $15,000, or 30 percent.
Why it matters for service firms
A project can look busy and valuable while earning little. Tracking margin by project reveals which services, clients, and pricing models deserve more of your time.
Frequently asked questions
Should overhead be included in project margin?
Many firms show margin before overhead to judge delivery performance, then after overhead to judge overall contribution. Showing both views is more informative than choosing only one.
How often should project margin be reviewed?
Monthly for active projects, and again at completion. Early review lets you adjust staffing, scope, or price while there is still time to protect the result.
Related terms and guides: project profitability, gross profit, direct costs, and scope creep.