Profit First Allocation Calculator — Methodology

Step-by-step calculation

Find your revenue tier and the dollar allocation for each Profit First bank account.

1. 1

   Enter monthly top-line revenue

   Gross revenue before any deductions.

2. 2

   Enter materials & subcontractors percentage

   Pass-through costs that aren't your money to allocate.

3. 3

   Read the auto-detected tier

   The calculator picks Tier A-E from annual Real Revenue.

4. 4

   Apply allocations to separate bank accounts

   The behavioural mechanism depends on physical account separation, not just spreadsheet math.

Assumptions and overrides

Uses the canonical TAPs from Mike Michalowicz's Profit First (revised 2017 edition). Tier definitions are based on annual Real Revenue (monthly × 12), not gross revenue. Most service businesses sit in Tiers A-C; Tiers D-E require operational maturity and team scale. Real Revenue formula subtracts materials and subcontractors only — internal employees count as OpEx, not Real Revenue reduction.

Every region default on the calculator is editable. If your effective rate, fee, or threshold differs from the headline figure shown, type your own number into the field — the calculator recomputes instantly without leaving this page.

Review cadence and corrections

This methodology and the underlying rate defaults are reviewed at least annually, and immediately following any change to the headline rate from IRS, HMRC, or SARS. Every substantive update is recorded on the public changelog. Spotted an error? See the corrections policy for how to report it.

See the full editorial policy for the standards every page on BusCalcTools is held to.