Painting profit margins

The IRS reports what one-owner businesses filing Schedule C earn, by sector. Painting falls under Specialty trade contractors. For tax year 2023, 2,521,516 returns reported $257.8 billion in receipts, $80.4 billion in cost of sales and $40.5 billion in net income less deficit (the table gives thousands of dollars):

The owner's own draw is not an expense on a Schedule C, so that net margin is mostly the owner's wage, not profit on top of it.

Painting is labor heavy: paint and supplies are a smaller share than the hours of prep, cutting in and cleanup.

For a worked example, our painting cost calculator puts exterior, paintable area at $1.85 to $4.20 a sq ft, typical $3.03, and treats about 85% of that as labor. On the typical price, that is about $2.57 of labor and $0.45 of materials, equipment and everything else, before your overhead and profit.

• Prep hours underestimated
• Extra coats not in the written scope
• Touch-up visits that are never billed
• Ladder and sprayer time on exteriors
• Paint bought at retail instead of a pro account

Ways painters raise margin: price prep as its own line so it is never free; buy paint on a pro account with a paint discount; spray exteriors and empty rooms when it is faster; sell touch-up visits and cabinet work in the off season.

The typical national prices from our sourced calculators are a check on whether your prices leave room for margin:

Work out the margin on each line of your menu, not just the big jobs. The usual painting menu: interior walls; ceilings; trim and baseboards; cabinet painting; accent wall; exterior, paintable area; pressure wash before painting; deck and fence staining; front door refinish; drywall patch, small hole; drywall patch, large hole; caulking and wood repair; lead-safe prep on pre-1978 homes.

Overhead comes out of the margin before profit. In painting it includes general liability insurance, which Insureon's customers who are painters pay an average of $72 a month for; commercial auto at $295 a month on the same figures.

Put one recent painting job into the calculator above, or switch it to "My margin for the year" to set your year next to the IRS benchmark. A 50% markup is a 33% margin; the markup calculator shows the rest.