Pricing a roofing job is the difference between making 25% net margin and breaking even. The math itself is straightforward, but most owners learn it the slow way — by under-charging for two years until they can't make payroll. This is the version of the calculation that actually works in the field, with the numbers in the order you should think about them.
Step 1: measure the roof correctly
Pricing starts with an accurate measurement. The unit roofing uses is the SQUARE — 100 square feet. A 30-square roof is 3,000 square feet of roof surface. Note that this is roof surface, not floor footprint. A 2,000-square-foot house with a steep roof might have 3,000+ square feet of roof.
There are three ways to measure: physically with a tape and walking the roof (most accurate, slowest), satellite measurement reports from EagleView or Hover (most common today, $25–$60 per report), or estimating off Google Earth (least accurate, free). For anything over $5,000, get the satellite report — the $40 cost protects you from a measurement error that wipes out your margin.
Step 2: calculate materials
Material cost = squares × material cost per square + waste factor + accessory items.
A typical asphalt shingle reroof has these line items per square: shingles ($85–$130 depending on grade), underlayment ($12–$22), starter strip ($8–$12), ridge cap ($18–$28), nails ($5), and miscellaneous flashing/sealant ($8–$15). Add a 10–15% waste factor on cut-up roofs and steep slopes. Then add the per-job items that don't scale by square: drip edge by linear foot, ice and water shield in valleys and at eaves (required by code in cold-weather states), pipe boots ($12–$25 each), step flashing for any wall-to-roof intersections, and ridge vent if you're installing it.
On metal, TPO, and other premium systems, the per-square material cost climbs sharply — $300–$700 per square for standing seam metal, $120–$200 for TPO. Always price materials with the supplier you actually use, on the day of the estimate. Lumber and metal pricing moves enough that an estimate from three weeks ago is already wrong.
Step 3: calculate labor
Labor cost depends on whether you use in-house W-2 crews or sub crews on a per-square rate. The typical sub rate for tear-off and reinstall on an asphalt shingle roof runs from $80 to $150 per square depending on pitch, complexity, and region. In-house crews on hourly wages cost about the same per square once you load them with workers' comp, payroll taxes, and benefits.
For estimating, the reliable approach is: total labor cost = squares × your fully-loaded labor rate per square. Track your actual labor cost per square over your last 10 jobs and use the average, not your best one. If your average is $110/sq and you've started bidding $90/sq because you watched a YouTube video, you're losing $20 per square on every job and you don't know it yet.
Add separate labor line items for tear-off (if it's not in your reinstall rate), deck repair (almost always a per-sheet add — typically $80 to $150 installed), and any specialty work like skylight resets, chimney flashing rebuilds, or wall-to-roof transitions.
Step 4: add overhead
Overhead is everything that isn't materials or direct labor: insurance, fuel, truck payments, office rent, software subscriptions, sales commissions, advertising, accounting, and the owner's salary. For most roofing companies, overhead runs between 15% and 25% of revenue. If you don't know your number, calculate it: total non-COGS expenses for last year ÷ total revenue last year = overhead percentage.
On every job, you must recover your overhead percentage in addition to materials and labor. If your overhead is 20%, every job needs to charge 20% above its direct cost just to cover the company's existence — before you've made any profit at all.
Step 5: add profit (and understand markup vs margin)
This is where most owners lose money without realizing it. There is a structural difference between MARKUP and MARGIN, and using markup math when you mean margin will under-charge you on every single job.
MARGIN is the profit as a percentage of the SELLING PRICE. A 20% margin on a $10,000 job is $2,000 of profit and $8,000 of cost. To calculate selling price from cost at a target margin, divide cost by (1 - margin). Cost of $8,000 ÷ (1 - 0.20) = $10,000.
MARKUP is the profit as a percentage of the COST. A 20% markup on $8,000 of cost is $1,600 of profit and a $9,600 selling price — only a 16.7% margin. The two are not the same. If you've been adding 20% to your costs and calling it a 20% margin, you're actually working at 16.7% margin and you're leaving money on every job.
For a target net profit of 15–25% on roofing work, the divide-by approach is the only one that gets you there. Cost ÷ (1 - target margin) = selling price.
A worked example
30-square asphalt shingle reroof, average pitch, residential, single layer tear-off:
• Materials: 30 × $115 = $3,450 + $400 in flashing/drip/pipe boots = $3,850 • Labor (subbed at $110/sq with $20/sq tear-off): 30 × $130 = $3,900 • Dump fee: $300 • Permit: $150 • Direct cost subtotal: $8,200 • Overhead at 20%: divide by 0.80 → $10,250 • Profit margin at 20%: divide by 0.80 → $12,813 • Final price: roughly $12,800 (call it $12,995 with a clean number)
On an insurance-paid job, the carrier will price the same scope using Xactimate. Their pricing may come in higher or lower than yours depending on the line items and their regional rates. If their scope is materially below yours, that's where supplements and scope-of-loss disputes come in — and where having a roofing-focused insurance shop on your side matters.