Profit First Calculator
- Percentages apply to real revenue: money in minus materials and subcontractors.
- The two revenue bands use the Profit First starting targets that published sources agree on. Above $500,000, published targets differ, so enter your own.
- The tax account is a savings target, not your tax bill. Ask a tax professional what you will owe.
- Starting targets are a goal to move toward a little each quarter, not an overnight change.
Split the money your business took in into the Profit First accounts: Profit, Owner’s Pay, Tax and Operating Expenses. Enter what came in and what went on materials and subcontractors, pick your targets, and see how much to move into each account.
How Profit First works
Profit First is a cash management method created by Mike Michalowicz. Instead of paying expenses and keeping whatever is left as profit, you take profit first and run the business on what remains. All income lands in one account, and on a regular schedule you move set percentages into separate accounts.
- Income: where every customer payment arrives.
- Profit: a share you set aside for the owners and a cash reserve.
- Owner’s Pay: what you pay yourself for the work you do in the business.
- Tax: savings for the taxes your business and its profit will owe.
- Operating Expenses: what the business can spend on everything else.
How to use the calculator
- Money that came in: the total customers paid you since your last allocation.
- Materials and subcontractors: costs you pass straight through to customers. Profit First calls what is left your real revenue, and all the percentages apply to it.
- Target percentages: pick the band for your yearly real revenue, or enter your own under More options.
For example, with $20,000 in and $4,000 of materials, real revenue is $16,000. With the under-$250,000 targets, you would move $800 to Profit, $8,000 to Owner’s Pay and $2,400 to Tax, leaving $4,800 for operating expenses.
Where the target percentages come from
Profit First sets starting targets by the size of the business, measured in yearly real revenue. The figures below are from Relay’s guide to Profit First percentages; Brex’s overview of the method gives the same 5 / 50 / 15 / 30 starting point:
| Yearly real revenue | Profit | Owner’s Pay | Tax | Operating Expenses |
|---|---|---|---|---|
| Under $250,000 | 5% | 50% | 15% | 30% |
| $250,000 to $500,000 | 10% | 35% | 15% | 40% |
For larger businesses, the published figures differ from one source to another, so the calculator asks you to enter your own. Check the targets in the Profit First book, or agree them with your accountant.
Putting it into practice
- Start small: if you are far from the targets, begin with a small profit percentage, such as 1%, and move 1 to 2 percentage points closer each quarter, as Relay’s guide suggests.
- Use a regular rhythm: Relay’s guide describes the Profit First habit of moving money on the 10th and 25th of each month, so cash builds up where you can see it.
- Review your targets: the same guide suggests checking them every six months, and again when your revenue moves into a new band.
- Keep tax money separate: the Tax account is savings, not your tax bill. Ask a tax professional what you will actually owe.
Frequently asked questions
Total revenue minus the cost of materials and subcontractors. For a service business with no materials, real revenue is the same as total revenue.
That is common at first. Use your own percentages to start closer to where you are today, then shift a little each quarter while you cut costs that don’t help the business grow.
Your own profit, owner’s pay and tax percentages add up to more than 100%. Lower one of them until the share is zero or above.
No. The calculation runs in your browser. Nothing you type is stored or sent to us or anyone else.
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Reviewed by Maxwell. Last reviewed October 23, 2026. Methodology: Profit First starting targets for real revenue under $250,000 and $250,000 to $500,000, as published by Relay and Brex; operating expenses receive the remainder.