how much profit does an electrical contractor make

How Much Profit Does an Electrical Contractor Make?

How Much Profit Does an Electrical Contractor Make?

Whether you’re taking on a job at a larger company or opening up a business of your own, one of the base questions is always going to be how much you earn. The electrical trade is no different. Many people are drawn to the notion of being an electrician because of the supposed earning potential, and many electricians go on their own for the same reason. However, the last thing you want to do is make a major career decision based on a flawed idea or myth. So, with this in mind, here’s an answer to the question “how much profit does an electrical contractor make?” along with the salary for those who want to work for a larger business.

electrical contractor
Photo by Dmitry Kalinovsky

How Much Money Does an Electrical Contractor Make?

One common question that comes up when talking about the electrical trade is “can an electrician make six figures?” The answer here is a multi-faceted one. At first glance, the answer would be no. Statistics show that on average, electrical contractors in the U.S. make $81,462 a year. It’s somewhat close to six figures, but not quite. With that said, though, there are a few additional factors you need to take into account when looking at this figure.


Senior electricians with more proven experience can command higher salaries, even getting into the six-figure range. People who want to increase their earning potential faster may want to consider looking into additional certifications.


We can’t underestimate the wide variance of the costs of living across this country, and many electrician jobs are compensated with that in mind. For example, a similar job in New York or Los Angeles will likely pay more than in the Midwest or Great Plains. However, that electrician in the Midwest or Great Plains likely has to pay a lot less in terms of rent or cost of living, so there is a balance of sorts.

Photo by LightField Studios


You need to remember that electricians service a variety of different industries, and some of these pay more than others. For example, an electrician working in natural gas has a far higher earning potential than someone in nonresidential construction. Of course, to work in these higher-paying industries, you generally need to make a larger investment in training, and may even need to get a degree in order to be properly qualified.

How Do You Calculate Profit For Your Electrical Contracting Business?

If you want to get technical, one of the ways to maximize your earning potential in the electrical world is opening up a successful business of your own. Heading your own team of contractors means a massive shift in finances, but also a massive shift in responsibility. Running a business on your own means that you are responsible for ensuring enough profit to keep a healthy cash flow, allowing you to do basic things like paying your creditors and employees on time. You also have a much higher time investment that you need to make.

So, with this in mind, how much profit does an electrical contractor make on each job? This, of course, varies on your bids and your efficiency. The basic profit formula that applies to every business is that your total income minus your total expenses equal your profit. Depending on your niche or other issues, you may need a variant of this, but let’s focus on this equation for now. What are some of the issues that are most likely to impact your profit?

electrical contracting business
Photo by Monkey Business Images


For the purposes of this conversation, these are two sides of the same coin. If you bid too much for certain jobs, you’re likely going to get passed over, meaning that your income is lower. Technically, you’re not incurring the expenses of that job, but you still have to pay regular operating expenses/payroll, no matter how well the business is doing. On the other hand, underbidding can be a more insidious way for you to lose profit. You may get lots of work and think you are doing well, but if you’re not making enough compared to what it takes to do the job, you may be losing money overall. This is a major danger to young companies without a good financial organization.

Unsatisfied customers

Again, this cuts into profits in different ways. If the customer wants a refund outright or refuses to pay, you’ve lost money on a job. However, in some cases, if you are at fault, you may need to fix the issue with no added pay. This is taking away work hours that you could be dedicating towards paid work. As a result, you want to make sure that you’re trying to provide quality as much as possible.


 In some cases, you may get the job done right, but not as fast as you could be. This minimizes the amount of work you can get done with your team, and in turn, hurts your overall profit. Your goal should be to do as much quality work as fast as possible, with an appropriate bid that lets you get a notable degree of profit.

Whether you’re a single contractor or part of a larger business, having an effective profit margin formula is key to success as an electrician. Even the most experienced professional can’t base a good profit margin on a hunch. You need concrete financial information that’s well organized and easily accessible, from your history of bids to your actual expenses. You also need to be able to keep track of employee and equipment activity to see the source of inefficiencies that could impact your overall profit formula.

Photo by Nomad_Soul

How Much Profit Does an Electrical Contractor Make? Final Thoughts

Now you can answer, “how much profit does an electrical contractor make?” This is best accomplished through electrical contractor management software like eSUB. With our modular model, you can only buy the software you need to help increase your profit margin. Have a full, easy to understand picture of your finances, and overall business. This combination gives you all the tools you need to drive profits higher and higher.