Where plumbing contractors lose money
7 things cost plumbing contractors money without ever becoming a line item, and each one traces to a step you can install. Plumbing contractors average 25% gross margin, 16% overhead and 9% net profit at $1M–$5M of revenue. The CFOS target at that size is 27.5% gross margin, 15% overhead and 12.5% net, and the 3.5 points left on the table is where those mechanisms live. Figures for all 7 revenue bands are in the table below.
Plumbing ranks 1st of 7 in mechanical and life safety on net profit, and it has heavier overhead than the 48-trade average. Here is every figure, across all 7 revenue bands.
Plumbing by revenue band
| Metric | $1M–$5M | $5M–$10M | $10M–$25M | $25M–$50MModeled | $50M–$100MModeled | $100M–$500MModeled | $500M+Modeled | CFOS target at $1M–$5M |
|---|---|---|---|---|---|---|---|---|
| Overhead | 16% | 15% | 14% | 13% | 12% | 11% | 10% | 15% |
| Gross margin | 25% | 26% | 27% | 28% | 30% | 31% | 33% | 27.5% |
| Net profit | 9% | 11% | 13% | 15% | 18% | 20% | 23% | 12.5% |
| Metric | $1M–$5M | $5M–$10M | $10M–$25M |
|---|---|---|---|
| Overhead | 15% | 14% | 13% |
| Gross margin | 27.5% | 28.5% | 29.5% |
| Net profit | 12.5% | 14.5% | 16.5% |
Modeled extension of the survey curve, not reconciled against the licensed CFMA Benchmarker. That applies to the 4 bands above $10M to $25M, and no CFOS target is published for them.
Gross margin and overhead come from CFMA, Jones Maresca and SPM's own trade data, because those are the figures those sources report by trade and size. Net profit is calculated from them as gross margin minus overhead, so the three rows tie. That makes it an operating profit figure: what is left before interest, other income and expense, and the tax planning choices owners make, such as bonuses, depreciation methods and retirement contributions.
Surveys report net income before taxes after those items, so a reported net can run below the figure here. At the typical contractor the difference is small: CFMA's 2025 medians are 7.1 percent before interest and taxes and 6.7 percent net income before taxes. It grows with size. Against the separate measured net profit dataset, the calculated net runs 0.8 points higher at $1M to $5M, 2.2 points at $5M to $10M and 3.5 points at $10M to $25M, because the gross margin and overhead rows change faster with size than reported net profit does.
Above the $10M to $25M band the gross margin and overhead rows are a modeled extension of the same curves. They have not been reconciled against the licensed CFMA Benchmarker, and the calculated net there runs well above survey medians, so read those bands as a model and not as a survey result.
Run On CFOS. Run On CFOS Trade Benchmark Reference: Plumbing. 2026. Sulphur Prairie Operations, LLC. https://runoncfos.com/trades/plumbing. CC BY 4.0.
Figures on this page were last revised 2026-08-21. Published under CC BY 4.0, which permits reuse of any figure here, including commercially, as long as the credit above travels with it. The same figures in machine-readable form: /benchmarks.json.
Trade level gross margin and overhead come from figures CFMA, Jones Maresca and other sources publish, and Run On CFOS derives net profit as gross margin minus overhead. The CFOS targets beside them are from the book CONTROL: C.F.O.S. Construction Financial Operating System, published with the full reference at runoncfos.com.
- 2024 Construction Financial Benchmarker, Executive Summary, Construction Financial Management Association, 2024.
- 2025 Construction Financial Benchmarker, Executive Summary, Construction Financial Management Association, 2025.
- 2025 Performance Benchmarks, Construction Companies, Jones Maresca and Company, 2025.
- Run On CFOS Trade Benchmark Reference, Sulphur Prairie Operations, LLC, 2026.
Sourcing and method: the methodology page.
Which bands are measured. The 4 bands above $10M–$25M extend the survey curve further out and have not been reconciled against the licensed CFMA Benchmarker. How every figure was built is explained on the methodology page.
7 problems specific to plumbing
The domestic hot water plant is 30 weeks out, the rep wants a big number at release, and the unit doesn't get set until the mechanical room is finished at the very end of the job. The underground is holding test and ready to cover, the pump truck is scheduled, and the inspector's first open slot is after the pour date. You bid copper in March, bought it at buyout in September, and the escalation language you fought for only protects half the scope. You were in the dirt before the steel got there, and you'll see that retention when the building opens.
Each one below points at the item, the unit, the clock, or the party that makes it a plumbing problem, and it says which step fixes it.
| Mechanism | Why it's specific to this trade | Step |
|---|---|---|
| Your Water Heater Deposit Goes Out Eight Months Early | Electrical gear gets long lead attention from everybody, because energizing the building is on the GC's own critical path and the release date appears in his schedule and his phone calls. Plumbing source equipment sets after the building is basically built, so the release date goes untracked upstream until the unit is late and the CO is at risk. That leaves the longest lead time and the last billable activity attached to the same package, with the plumber financing all of it alone. | Project management |
| Concrete Is Booked Thursday and Inspection Opens Monday | No other trade's inspection comes between a general contractor and a concrete pour, so the whole slab schedule pushes against one plumbing sign off. Drywall, paint, and tile get inspected while the work is still visible and fixable. Plumbing gets inspected at the one moment when the next step makes the work permanent, which is why the underground phase generates standby time and buried liability that no other scope on the job produces. | Project management |
| Copper and Resin Move Apart and Your Bid Covers One | Most trades have one input. A framer watches lumber and a roofer watches asphalt. A site contractor tracks diesel along with pipe. Plumbing is the scope where a metals market and a petrochemical market both live inside the same lump sum, on the same schedule of values, and where the usual substitution play moves material out of one curve while leaving the fixture package squarely in the other. | Estimating system |
| You Earn It in Month Two and Collect in Month Twenty-Six | Plumbing goes in the ground first and trims out last, and no other trade on the job owns both ends. A site contractor bills early and closes out early. A finish trade bills late, then waits a short time for release. Plumbing bills at the front of a two year schedule and collects at the back of it, so the retention on your earliest and most exposed work is held the longest and funds somebody else's project the entire time. | Monthly cadence |
| You Restart the Job Five Times and Price One of Them | Most subs mobilize once, maybe twice. Plumbing follows the structure of the building itself, so the schedule pulls you back every time a new condition is ready, and the time between visits gets filled with other jobs. The restart cost is real labor, it happens five times, and it hides completely because the whole contract runs on one cost code with no split between underground, rough, and trim. | Job cost structure |
| Every Leak Comes Back to Your Job Cost | Plumbing installs early, stays in everyone's way for months, then disappears inside the building while other trades work directly on top of it. That combination of long exposure and total concealment belongs to piping, and it means your damage gets discovered at the worst moment by the worst symptom. The general contractor takes the shortest path to a dry building, and that path runs straight through your invoice. | Standards and accountability |
| A Thirty Dollar Fitting Writes a Five Figure Check | Every trade has warranty work. Plumbing is the one where the defect keeps running 24 hours a day until somebody finds it, and where the damage is almost entirely to other people's scope. That's why a plumbing callback becomes a property damage claim with a deductible and a loss run behind it, and why the cost hits a period so far from the job that the two never get tied together. | Overhead calculation |
Plumbing against the other 47 trades
| Metric | Plumbing | Mechanical and life safety average | All 48 average | Rank |
|---|---|---|---|---|
| Overhead | 16% | 16.1% | 15.1% | 32nd of 48 |
| Gross margin | 25% | 24.6% | 22.1% | 5th of 48 |
| Net profit | 9% | 8.4% | 7% | 2nd of 48 |
Plumbing sheds 6 points of overhead between $1M–$5M and $500M+, against 6.3 for mechanical and life safety as a group. Inside that group, Mechanical, Plumbing and Elevator all keep 9%, the most in the group, and Fire protection runs the leanest overhead at 15%. The first of those is this trade.
Other mechanical and life safety trades
What owners ask
What overhead should a plumbing contractor run?
Plumbing shares its overhead figure with 12 other trades at this revenue, which is what the published data resolves to. It averages 16% at $1M–$5M and 10% at $500M+, as a percentage of revenue. That is 0.1 points below the mechanical and life safety average of 16.1%. The CFOS target at $1M–$5M is 15%. The CFOS target is one point leaner than your trade's industry average at your revenue.
What gross margin should a plumbing contractor run?
Plumbing shares its gross margin figure with 2 other trades at this revenue, which is what the published data resolves to. It averages 25% at $1M–$5M and 33% at $500M+, as a percentage of revenue. That is 0.4 points above the mechanical and life safety average of 24.6%. The CFOS target at $1M–$5M is 27.5%. The CFOS target recalculates at your revenue: whatever gross margin produces the net profit target once overhead is paid, never below your trade's own industry average.
What net profit should a plumbing contractor run?
Plumbing shares its net profit figure with 5 other trades at this revenue, which is what the published data resolves to. It averages 9% at $1M–$5M and 23% at $500M+, before taxes, as a percentage of revenue. That is 0.6 points above the mechanical and life safety average of 8.4%. The CFOS target at $1M–$5M is 12.5%. The CFOS target recalculates at your revenue: 10 percent before taxes, or 3.5 points better than your trade's industry average, whichever is higher.
What profit margin should a small plumbing business run?
Owners usually mean net profit when they say profit margin, and for plumbing at $1M–$5M that's 9%. Gross margin is a different number, 25%, and it's what's left after job costs but before overhead. Overhead is the 16% between the two. A small plumbing business holding 9% net is at the published figure for its size, and the CFOS target at that revenue is 12.5%.
Does plumbing get more profitable as it grows?
Overhead is the number that moves. Plumbing sheds 6 points between $1M–$5M and $500M+, which is in line with the 6.3 points mechanical and life safety sheds as a group. Net profit is already above the 48-trade average, so the room is in holding it while revenue climbs.
Where does plumbing rank against the other trades?
Plumbing ties 2 trades in mechanical and life safety on net profit, all at 9%. Nothing publishes more, and Mechanical and Elevator match it. Fire protection runs the leanest overhead at 15%. Gross margin ranks 5th of 48 and overhead ranks 32nd.
That's the industry average and the CFOS target for plumbing at every size. Want your own books set beside them? The Financial Health Snapshot builds a CEO Report from your last twelve months, sets every figure against your trade, and walks you through it on a 60 minute call. SPM The Construction CFO (Sulphur Prairie Management, LLC) is a separate firm, and the same author runs it.
Everything on this page is something you can install yourself, and CONTROL is the order to do it in. If you would rather buy the finished result, SPM The Construction CFO does this work for plumbing contractors as a service. It is a separate firm, Sulphur Prairie Management, LLC, run by the same author.
Wrote CONTROL, the 8 step system behind these figures. More about the author.