Markup vs Margin Calculator
Put in what a job or part costs you and the percentage you want. You'll see the price to charge and what that works out to as both markup and margin, so you don't mix the two up on a quote.
Calculator
How to use it
- Enter your total cost: materials, labor and anything else the job costs you.
- Pick whether you're working from a markup, a margin, or a price you already have in mind.
- Read the price to charge. Both percentages are shown so you can check your quote against either one.
Markup and margin are not the same number
Markup is profit as a share of your cost. Margin is profit as a share of the selling price. Same job, same dollars, two different percentages.
Say a job costs you $1,000 and you sell it for $1,500. You made $500. That's a 50% markup ($500 ÷ $1,000) but only a 33.3% margin ($500 ÷ $1,500).
This is where quotes go wrong. If you want a 50% margin and you add 50% to your cost, you've only got a 33% margin. To get a 50% margin you have to double your cost.
The formulas, if you'd rather do it by hand:
- Price from markup = cost × (1 + markup ÷ 100)
- Price from margin = cost ÷ (1 − margin ÷ 100)
- Markup = (price − cost) ÷ cost × 100
- Margin = (price − cost) ÷ price × 100
Once you have your number, put it on a contractor quote template or an estimate template. Not sure what your hourly labor rate should be? Try the contractor hourly rate calculator.
Questions
Is a higher markup or a higher margin better?
Neither. They describe the same profit in two ways. Markup will always be the bigger number for the same job, so make sure you know which one someone means.
Can margin be over 100%?
No. Margin is a share of the price, so it always stays under 100%. Markup can go over 100%. A 100% markup means you charge double your cost.
Should overhead be in my cost?
It's up to how you price. Some contractors put only the job's direct costs here and set the markup high enough to cover overhead. Others spread overhead into the cost first. Just stay consistent so your quotes stay comparable.
Is anything I type saved or sent?
No. The math runs in your browser and nothing is uploaded.
Templates and calculators are for general use only and are not legal, tax or accounting advice.