Split your income the Profit First way. Enter your real revenue for the period and see exactly how much goes to Profit, Owner's Pay, Tax, and Operating Expenses — pre-filled with the method's targets, and fully adjustable.
The pre-filled percentages are Mike Michalowicz's suggested starting Target Allocation Percentages for businesses under ~$250k in real revenue (5% Profit / 50% Owner's Pay / 15% Tax / 30% OpEx). They shift as a business grows and are guidelines, not rules — adjust to your situation. Profit First is a method by Mike Michalowicz; this is an independent free tool, not affiliated. Not financial advice.
Profit First flips the usual formula. Instead of Sales − Expenses = Profit (where profit is whatever's left, often nothing), it takes Sales − Profit = Expenses: you allocate money to Profit, Owner's Pay, and Tax first, then run the business on what remains. This calculator does the split on your real revenue so each account is funded on purpose, not by accident.
Each account = real revenue × its target percentage
Profit First is a cash-management method from Mike Michalowicz's book of the same name. Its whole idea is a behavioural trick: most owners use Sales − Expenses = Profit, so profit is the leftover — and there usually isn't one, because spending expands to fill the account. Profit First inverts it to Sales − Profit = Expenses. You move set percentages into separate accounts (Profit, Owner's Pay, Tax, Operating Expenses) the moment money comes in, then run the business on what's left in the OpEx account. Scarcity in OpEx forces efficiency; the Profit and Tax accounts fund themselves automatically.
The percentages apply to real revenue — your total income minus the cost of materials and subcontractors. A contractor who bills $20,000 but pays $8,000 to subs and suppliers has $12,000 of real revenue; allocating off the $20,000 would starve the business. Using real revenue keeps the split honest for pass-through- heavy trades.
For a business under about $250k in real revenue — which covers most solo operators and small shops — the suggested Target Allocation Percentages are 5% Profit, 50% Owner's Pay, 15% Tax, and 30% Operating Expenses. As real revenue grows, the Profit share tends to rise and Owner's Pay to fall (more of the work is done by staff, not the owner). These are guidelines, not gospel — Michalowicz is explicit that you adjust them to your business.
Your Current Allocation Percentages (what you spend now) are rarely the targets on day one. The method says move gradually — shift a few points each quarter from OpEx toward Profit and Owner's Pay — so the business adapts instead of seizing up. A worked example: on $8,000 of real revenue at the starting targets, you'd route $400 to Profit, $4,000 to Owner's Pay, $1,200 to Tax, and $2,400 to OpEx.
Profit First is a method by Mike Michalowicz; this calculator is an independent free tool, not affiliated with or endorsed by the author. It's an organizational aid, not financial advice.
For a business under about $250k in real revenue, the book's target allocations are 5% Profit, 50% Owner's Pay, 15% Tax, and 30% Operating Expenses. The Profit share rises and Owner's Pay falls as revenue grows. They're starting targets — adjust to your business.
Top-line revenue minus the cost of materials and subcontractors — the money your business actually has to allocate. Using real revenue (not gross sales) keeps the percentages meaningful for businesses that pass a lot of money through to materials.
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It uses standard formulas and recalculates the moment you change a value, so the math is exact for the inputs you enter. Treat the result as a reliable planning estimate; for decisions with legal or tax consequences, confirm the figures with a qualified professional.
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Last reviewed: September 2026. Free to use, no signup — Profit First Calculator by ToolWise Digital.
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