Two different numbers
Job gross margin is revenue minus direct job costs, such as field labor, materials, subs and permits, as a percentage of revenue. Net profit is what’s left after overhead too: office staff, insurance, rent, vehicles, software, marketing and the owner’s salary.
A simple example
Say a business brings in $1,000,000 a year at an average 30% gross margin. That’s $300,000 of gross profit. If overhead is $250,000, net profit before taxes is $50,000, or 5%. A job with a 15% gross margin may look positive, but at that level the business wouldn’t cover its overhead.
These numbers are for illustration only. The right margins depend on your trade, size and overhead.
Why it matters for pricing
Pricing that only covers direct costs plus a small markup can leave overhead unpaid. Knowing your overhead, and the gross margin each type of work needs to cover it, is the starting point for confident bids. That analysis is part of CFO services.
This guide is general information, not tax, legal or accounting advice for your specific situation.