Cleaning Business Profit Margin: How to Calculate It
Being busy and being profitable are not the same thing. Plenty of cleaners work full weeks and still can't say how much they actually made last month, or which clients are worth keeping.
Profit margin answers that. This guide explains what it means for a cleaning business, how to calculate it per job and per month, and how to use it to fix underpriced homes. All numbers in the examples are made up for illustration.
What profit margin means
Profit margin is the share of your revenue that is left after costs. The formula is:
Profit margin = (revenue − costs) ÷ revenue
If a clean brings in 150 and costs you 120, the profit is 30 and the margin is 30 ÷ 150 = 20%. In plain words: you keep 20 out of every 100 the client pays.
Gross margin vs net margin
For a cleaning business, it helps to look at two levels:
- Gross margin only subtracts the costs of doing the job: cleaner pay, travel and supplies. It tells you whether each visit is priced well.
- Net margin also subtracts overhead: insurance, phone, software, advertising, accounting and other running costs. It tells you whether the business as a whole makes money.
A job can have a healthy gross margin and still leave the business with a thin net margin once overhead is paid.
A note for solo cleaners: if you don't pay yourself a wage in the numbers, your "profit" is really your pay plus the business profit mixed together. Put your own target hourly pay into labor costs first. Then the margin shows what the business earns on top of paying you.
How to calculate margin for one job
Example: a recurring clean priced at 150.
| Item | Amount |
|---|---|
| Price | 150.00 |
| Cleaner pay (4.5 labor hours x 20) | 90.00 |
| Travel + supplies | 15.00 |
| Gross profit | 45.00 (30% gross margin) |
| Overhead (15% of 105) | 15.75 |
| Net profit | 29.25 (19.5% net margin) |
To set overhead as a percentage, divide a typical month of overhead by a typical month of direct costs (pay, travel and supplies). If overhead is 700 and direct costs are 4,200, that is about 16.7%.
How to calculate your monthly margin
Monthly numbers smooth out the ups and downs of single jobs. Add up a month:
| Item | Amount |
|---|---|
| Revenue | 6,000 |
| Cleaner pay | 3,600 |
| Travel + supplies | 600 |
| Gross profit | 1,800 (30%) |
| Overhead | 700 |
| Net profit | 1,100 (about 18.3%) |
Do this every month and you will see trends early, for example rising fuel costs eating into margin, before they become a problem.
Margin vs markup: don't mix them up
Markup is profit divided by cost. Margin is profit divided by price. The same profit gives two different percentages, and confusing them is one of the most common pricing errors.
| Margin | Markup needed |
|---|---|
| 20% | 25% |
| 25% | 33.3% |
| 30% | 42.9% |
| 40% | 66.7% |
| 50% | 100% |
To convert: markup = margin ÷ (1 − margin), and margin = markup ÷ (1 + markup).
To set a price from a target margin, divide your cost by (1 − margin). A job that costs 120 at a 25% target margin should be priced at 120 ÷ 0.75 = 160. Adding 25% to cost would give 150, which is only a 20% margin.
Profit per hour: find the homes that underpay
Margin per job is useful, but in a service business your real limit is time. Profit per labor hour shows which homes earn the most for the hours they take.
Here are three example homes, with cleaner pay at 20 per hour and overhead at 15%:
| Home | Price | Labor hours | Travel + supplies | Cost incl. overhead | Profit | Margin | Profit per labor hour |
|---|---|---|---|---|---|---|---|
| A | 140 | 4.0 | 12 | 105.80 | 34.20 | 24.4% | 8.55 |
| B | 120 | 4.5 | 26 | 133.40 | −13.40 | −11.2% | −2.98 |
| C | 95 | 2.5 | 10 | 69.00 | 26.00 | 27.4% | 10.40 |
Home B looks like a decent client, but it takes the most time, is far away and loses money on every visit. Home C has the lowest price but earns the most per hour. Without these numbers, it is easy to guess the opposite.
What to do with a home like B:
- Re-time a visit. Has the job grown since you first quoted it?
- Recalculate the price. To reach a 25% margin, B would need 133.40 ÷ 0.75 = about 178.
- Talk to the client: explain the new price, or offer a shorter scope that fits the current price.
- If neither works, replace it with a client closer to your other homes.
What is a "good" profit margin for a cleaning business?
There is no single correct number. Published figures vary by source, country, and whether they mean gross or net margin, so be careful with any benchmark you read. A more useful test is to ask whether your net profit, after paying yourself a fair wage, covers:
- taxes on the profit,
- savings for slow months and equipment,
- money to grow (marketing, hiring, training).
If it doesn't, your prices or costs need work, whatever the benchmark says.
Ways to improve your margin
- Raise prices on homes with low profit per hour first, rather than raising everyone.
- Cluster your route. Less driving between homes means lower travel cost and more paid hours in the day.
- Track supply costs per visit. Buying in bulk or switching to concentrates can help, but don't cut quality clients can see.
- Price add-ons separately: inside the oven, inside the fridge, interior windows, laundry.
- Set a minimum visit charge so short jobs far away still cover travel.
- Review discounts. A recurring discount should never push a visit below cost.
- Review your numbers regularly, at least monthly, and your prices at least once a year.
Track it in a simple sheet
You don't need accounting software to start. One row per visit with date, client, price, labor hours, travel, supplies and paid or unpaid is enough to calculate margin and profit per hour each month.
To price new jobs at the margin you want, try the free House Cleaning Price Calculator. You fill in your pay, travel, supplies, overhead, target margin and a table of labor hours by service and home size once. Then each quote is three dropdowns: home size, service and visit frequency. An internal panel shows the minimum price, the recommended price, profit per visit, profit per hour and the monthly price for recurring clients, and a printable customer quote is built for you.
FAQ
Is profit margin the same as profit?
No. Profit is an amount (for example, 1,100 a month). Margin is that profit as a share of revenue (1,100 ÷ 6,000 = about 18.3%). Margin lets you compare months and jobs of different sizes.
Should I calculate margin per job or per month?
Both. Per job tells you whether a price is right. Per month tells you whether the business is working overall, including overhead and quiet weeks.
Does my own pay count as a cost?
Yes, if you want an honest margin. Include a fair hourly pay for your own cleaning time in labor costs. Otherwise a business that only breaks even can look profitable.