How do you calculate project margin on a commercial kitchen install?

Subtract total delivered cost from the selling price to get the dollar gap, then divide by your revenue basis. In the example, $248,000 minus $207,500 is a $40,500 gap, divided by $248,000 gives a 16.33% margin.

What is a good margin on foodservice equipment projects?

Equipment-heavy packages often run 12 to 22% gross, while jobs weighted toward design, fabrication, and installation labor can reach 25 to 35%. The 16.33% in the example is typical for an equipment-dominant package with modest install scope.

What is the difference between margin and markup on a kitchen project?

Markup is the gap as a percentage of cost; margin is the gap as a percentage of selling price. The $40,500 gap is 19.5% markup on the $207,500 cost but only 16.33% margin on the $248,000 price.

Why does the calculator use a separate revenue basis field?

Usually the basis equals the selling price, as in the example. But for tax-excluded, owner-furnished-equipment, or net-of-freight reporting you may want margin measured against a different revenue figure, so the basis is its own input.

How do change orders affect project margin?

Add-scope change orders raise both selling price and delivered cost; if you carry your standard margin on the add, the percentage holds. Absorbing field changes without a change order is the fastest way to erode the 16.33% you quoted.

Does this margin include installation labor?

Yes, as long as you put all delivered costs, including freight, rigging, and on-site labor, into the delivered cost field. Leaving installation labor out inflates the margin and sets up a loss on the job.

Commercial Kitchen Equipment calculator

Project Margin Calculator

Project Margin is the gross profit percentage a foodservice equipment dealer or kitchen design-build firm earns on a complete installed project. A commercial kitchen package bundles equipment, fabrication, freight, rigging, and on-site installation, so margin on the whole job matters far more than markup on any single hood or range. Estimators, project managers, and dealership principals use this number to vet quotes before they go out, protect against margin slippage during change orders, and benchmark jobs against the company's target. On large foodservice contracts a few points of margin is the difference between a healthy quarter and working for free.

What this calculator does

Calculate overall project margin for a commercial kitchen equipment package including equipment, install, freight, and support costs.
checking margin for a complete commercial kitchen equipment project
It computes the gross margin percentage by dividing the selling-price minus delivered-cost gap by your chosen revenue basis.

Formula used

Project Margin dollar gap = total project selling price - total delivered project cost
Project Margin = dollar gap ÷ project revenue basis

Inputs explained

Total project selling price quoted to client:
Total delivered project cost:
Revenue basis for margin calculation:

How to use the result

Use it when finalizing a kitchen equipment and installation quote, or reviewing a completed job to see whether it hit the target margin.
It is a gross margin on delivered cost; it does not subtract overhead, sales commissions, or warranty reserves, so net profit will be lower.

Current U.S. benchmarks

Industrial natural gas averages $4.9 per Mcf (EIA, Apr 2026), down 7.7% from a year earlier, with industrial electricity at 8.66 cents per kWh. Process heating and refrigeration budgets track both.
Steel mill PPI stands at 348.53 (BLS, May 2026), up 6.7% from a year earlier. New factory orders are up 2.3% year over year (Census).

Common questions

How do you calculate project margin on a commercial kitchen install? Subtract total delivered cost from the selling price to get the dollar gap, then divide by your revenue basis. In the example, $248,000 minus $207,500 is a $40,500 gap, divided by $248,000 gives a 16.33% margin.
What is a good margin on foodservice equipment projects? Equipment-heavy packages often run 12 to 22% gross, while jobs weighted toward design, fabrication, and installation labor can reach 25 to 35%. The 16.33% in the example is typical for an equipment-dominant package with modest install scope.
What is the difference between margin and markup on a kitchen project? Markup is the gap as a percentage of cost; margin is the gap as a percentage of selling price. The $40,500 gap is 19.5% markup on the $207,500 cost but only 16.33% margin on the $248,000 price.
Why does the calculator use a separate revenue basis field? Usually the basis equals the selling price, as in the example. But for tax-excluded, owner-furnished-equipment, or net-of-freight reporting you may want margin measured against a different revenue figure, so the basis is its own input.
How do change orders affect project margin? Add-scope change orders raise both selling price and delivered cost; if you carry your standard margin on the add, the percentage holds. Absorbing field changes without a change order is the fastest way to erode the 16.33% you quoted.

Last reviewed 2026-05-12.