Review the job
Job Cost Variance Calculator
Compare estimated and actual job costs, see where profit leaked and which cost category caused the largest variance.
QuoteFormula · The formula for profitable jobs.
Estimate vs actual
Cost comparison
- Labor
- $2,000 estimated · $2,650 actual · $650 variance
- Materials
- $3,000 estimated · $3,250 actual · $250 variance
- Equipment
- $300 estimated · $250 actual · -$50 variance
- Subcontractors
- $1,000 estimated · $1,000 actual · $0 variance
- Travel
- $100 estimated · $100 actual · $0 variance
- Permits
- $100 estimated · $100 actual · $0 variance
- Disposal
- $50 estimated · $50 actual · $0 variance
- Overhead
- $700 estimated · $700 actual · $0 variance
- Other
- $0 estimated · $0 actual · $0 variance
Profit and leakage
- Expected profit
- $2,550
- Actual profit
- $1,700
- Profit leakage
- $850
- Expected margin
- 25.5%
- Actual margin
- 17%
- Primary leakage
- Labor
Planning estimate based on figures entered in this browser. Not a guarantee of cost or profit.
Estimate versus actual
Start from a saved job
Loading a saved job fills in the estimate and its selling price. Enter the actual column as costs come in, then save the comparison back to the job.
No saved jobs yet. Save an estimate from the Job Cost Calculator first.
| Category | Estimated | Actual | Variance |
|---|---|---|---|
| Labor | $650 | ||
| Materials | $250 | ||
| Equipment | -$50 | ||
| Subcontractors | $0 | ||
| Travel | $0 | ||
| Permits | $0 | ||
| Disposal | $0 | ||
| Overhead | $0 | ||
| Other | $0 |
Profit leakage report
Labor created the largest unfavorable variance. Review the quantity, productivity, or price assumption before the next similar estimate.
Split the variance into its causes
A job misses its estimate for one of four reasons: the hours were wrong, the rate was wrong, the quantity was wrong, or the unit price was wrong. Enter the estimate and the actuals for one labor role and one material to see which one moved. These fields explain a single category and do not change the category totals above.
| Variance | How it is calculated | Amount |
|---|---|---|
| Labor rate variance | (actual rate − estimated rate) × actual hours | $92 |
| Labor hours variance | (actual hours − estimated hours) × estimated rate | $300 |
| Total labor variance | Rate variance + hours variance | $392 |
| Materials price variance | (actual unit price − estimated unit price) × actual quantity | $110 |
| Materials quantity variance | (actual quantity − estimated quantity) × estimated unit price | $300 |
| Total materials variance | Price variance + quantity variance | $410 |
Labor finished $392 above the estimate. The hours worked accounted for the larger share, so review the productivity assumption before reusing this estimate.
A positive amount means the actual cost came in higher than the estimate.
Your next step
Contractor Job Cost Calculator
Combine crew hours, materials, equipment, overhead and contingency into a construction job cost.
Start the next estimateThe method behind these numbers
How to review estimate vs actual job cost
A finished job is the best evidence you have about whether your estimating assumptions work. Compare it category by category, not just in total, and change one thing at a time.
What this calculation tells you
Short answer. Estimate-versus-actual compares what a job was expected to cost with what it really consumed. QuoteFormula compares each cost category at the same selling price and processing rate, then reports total variance, actual profit and profit leakage. A positive variance means actual cost exceeded the estimate; a negative variance means it came in under. Profit leakage is expected profit minus actual profit, so it shows the dollars that disappeared rather than only the percentage. One job is a sample, not a trend: look for repeated variance in the same category before changing standard assumptions. Actual costs should come from payroll, invoices and receipts, not from a second estimate, and change orders should be recorded separately so scope changes do not distort the comparison. Compare labor, materials, equipment and overhead separately so the largest unfavorable category is visible before it repeats.
How this calculator works
The formula
profit leakage = expected profit − actual profit at the same selling priceHow to use it
- Load a saved estimate or enter the estimated cost for each category.
- Replace the actual column with invoiced or recorded costs; do not simply reuse the estimate.
- Keep the selling price and processing rate consistent, then review total cost variance and the primary leakage category.
Reading the result
A positive variance means actual cost exceeded estimate; a negative variance means it came in under. One job is a sample, not a trend. Look for repeated variance in the same category before changing standard assumptions, and record change orders separately.
Worked example
Illustrative example: a job estimated at $7,250 in total cost sells for $10,000 with a 2% processing fee. If actual costs reach $8,100, expected profit of $2,550 becomes $1,700, so $850 leaked. Labor and materials added $900 while equipment came in $50 under budget.
Limitations
- Compare at the same selling price and the same scope; a change order changes both sides of the comparison.
- A single job shows what happened, not necessarily a permanent trend. Look for repeated variance before changing standard assumptions.
- Actual costs should come from real invoices, payroll and receipts, not from a second estimate.
Read the calculation methodology for the contracts behind every result or the full guide, How to review estimate vs actual job cost.
Frequently asked questions
- What does a positive variance mean?
- Actual cost came in above estimate, which is unfavorable for profit. A negative variance means the job cost less than planned. Compare each category so the source of the overrun is visible.
- What is profit leakage?
- Profit leakage is expected profit minus actual profit at the same selling price. It shows dollars lost to cost overruns, not just the percentage change, so the owner can see what the variance cost.
- Should one bad job change my standard assumptions?
- Not by itself. One job is a sample. Look for the same category running over across several jobs before changing labor rates, overhead recovery or contingency.