Markup vs margin calculator for contractors
Price a job from your own costs. See the selling price, your gross profit and the margin you really keep — and stop mixing up markup and margin.
Markup vs margin: the same job, two different prices
Markup is a percentage of your cost. Margin is a percentage of the price. Use the same number for both and you get two different prices — and two different paychecks.
You keep $200 of $1,200 = 16.7% margin
You keep $250 of $1,250 = 20% margin
Same costs, same "20%", a $50 difference on a $1,000 job. Repeat that across a year of jobs and it is real money.
Price from margin price = cost ÷ (1 − margin)
Margin of a price margin = (price − cost) ÷ price
Markup → margin margin = markup ÷ (1 + markup)
Margin → markup markup = margin ÷ (1 − margin)
| Margin you want | Markup to use | Price on $1,000 cost |
|---|---|---|
| 10% | 11.1% | $1,111.12 |
| 15% | 17.6% | $1,176.48 |
| 20% | 25% | $1,250.00 |
| 25% | 33.3% | $1,333.34 |
| 30% | 42.9% | $1,428.58 |
| 35% | 53.8% | $1,538.47 |
| 40% | 66.7% | $1,666.67 |
| 50% | 100% | $2,000.00 |
How to use the number you get
- Start from what the job costs you. Materials at what you pay, labor at what an hour costs you, and job extras like a dumpster or a sub.
- Decide whether overhead goes in the price. If you price on job costs only, your truck, insurance and phone are paid out of the gross profit. The calculator tells you when the price doesn't cover the overhead you entered.
- Pick markup or margin on purpose. If you think "I want to keep 25% of every job," that's a margin: use a 33.3% markup, or switch the calculator to margin.
- Check what is left. Gross profit still has to pay you and your taxes. If it's thin, the job is thin.
Want the full explanation, with a worked bathroom job and the mistakes that cost contractors the most? Read Markup vs margin for contractors: a plain guide.
Save your prices for the next job
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Questions contractors ask
Is a 20% markup the same as a 20% margin?
No. A 20% markup on $1,000 gives $1,200, and you keep 16.7% of that price. A 20% margin needs a price of $1,250. To keep 20% of the price, use a 25% markup.
Should I mark up materials and labor the same?
That's your call. Some contractors use one markup on everything; others put a smaller markup on materials and more on labor. You can run each part through this calculator separately and add the prices.
Does gross margin include overhead?
No. Gross margin is price minus the job's direct costs (materials, labor, other job costs). Overhead comes out of the gross profit. Enter your overhead and this calculator shows what is left after it, which is still not net profit.
Why can't I enter a 100% margin?
Margin is a share of the price. Keeping 100% of the price would mean the job cost you nothing. Any margin below 100% works; the closer you get, the faster the price climbs.
Where do the numbers go?
Nowhere. The math runs in your browser and nothing you type is sent to us. On talkestimate.com we count that the calculator was used, never what you typed.