Profit
In accounting, the term ‘profit’ refers to the financial benefit that is achieved when the work done and the expenses incurred by a business are exceeded by the amount of revenue generated by the activities of the business.
Put simply, profit is calculated as: Total revenue – Total expenditure
The owners of a business are responsible for deciding what to do with profit, and may reinvest it in the business, pay off outstanding debts, reward employees with bonuses and pay-rises, make payments to shareholders, and so on.
There are different types of profit that can be measured:
Profit may also be referred to as a ‘profit margin’. Profit margin is the percentage of the gross revenue that represents profit.
For more information, see Profitability.
When contractors submit tenders for construction works, they will typically identify profit and overheads as separate items in addition to the cost of labour, materials, plant, and so on.
Profit may be calculated as a percentage, which will vary according to risk, workload and economic climate and so on. It can also relate to the turnover of capital employed for each project; the more times a contractor can turnover its capital on a project the more it can afford to cut margins.
Construction contracts will generally provide for the contractor to claim direct loss and expense as a result of the progress of the works being materially affected by relevant matters for which the client is responsible. Contracts generally allow direct losses to be recovered (such as the cost of labour and materials), but may exclude indirect or consequential losses (such as loss of profit).
[edit] Related articles on Designing Buildings
Featured articles and news
Building Safety recap January, 2026
What we missed at the end of last year, and at the start of this...
National Apprenticeship Week 2026, 9-15 Feb
Shining a light on the positive impacts for businesses, their apprentices and the wider economy alike.
Applications and benefits of acoustic flooring
From commercial to retail.
From solid to sprung and ribbed to raised.
Strengthening industry collaboration in Hong Kong
Hong Kong Institute of Construction and The Chartered Institute of Building sign Memorandum of Understanding.
A detailed description fron the experts at Cornish Lime.
IHBC planning for growth with corporate plan development
Grow with the Institute by volunteering and CP25 consultation.
Connecting ambition and action for designers and specifiers.
Electrical skills gap deepens as apprenticeship starts fall despite surging demand says ECA.
Built environment bodies deepen joint action on EDI
B.E.Inclusive initiative agree next phase of joint equity, diversity and inclusion (EDI) action plan.
Recognising culture as key to sustainable economic growth
Creative UK Provocation paper: Culture as Growth Infrastructure.
Futurebuild and UK Construction Week London Unite
Creating the UK’s Built Environment Super Event and over 25 other key partnerships.
Welsh and Scottish 2026 elections
Manifestos for the built environment for upcoming same May day elections.
Advancing BIM education with a competency framework
“We don’t need people who can just draw in 3D. We need people who can think in data.”
Guidance notes to prepare for April ERA changes
From the Electrical Contractors' Association Employee Relations team.
Significant changes to be seen from the new ERA in 2026 and 2027, starting on 6 April 2026.
First aid in the modern workplace with St John Ambulance.
Solar panels, pitched roofs and risk of fire spread
60% increase in solar panel fires prompts tests and installation warnings.
Modernising heat networks with Heat interface unit
Why HIUs hold the key to efficiency upgrades.