Markup vs. Margin Calculator
The two get confused constantly — and it costs contractors real money. Enter your cost, and see exactly what to charge, your profit, markup, and margin side by side.
Markup is profit as a percent of your cost. Margin is profit as a percent of the price. A 25% markup is only a 20% margin — pricing off markup quietly leaves money on the table.
Markup → margin cheat sheet
| If your markup is… | …your margin is |
|---|---|
| 10% | 9.1% |
| 15% | 13.0% |
| 20% | 16.7% |
| 25% | 20.0% |
| 30% | 23.1% |
| 40% | 28.6% |
| 50% | 33.3% |
| 100% | 50.0% |
Markup and margin are not the same thing
Markup is your profit as a percentage of what the job costs you. Margin is that same profit as a percentage of the price you charge. Because the denominators differ, a 50% markup is only a 33% margin. Quote off markup thinking it’s margin and you’ll undercharge on every job.
How to use it
Enter your total job cost (materials + labor). Then pick whether you want to work from a target markup, a target margin, or a set selling price — the calculator fills in the rest, including your dollar profit. Use the cheat sheet below to memorize the common conversions.
What a healthy number looks like
Many trades aim for a 30–50% markup on smaller jobs, which lands around a 23–33% margin. General contractors managing subs and materials often build in higher markup to cover project management, bonding, and contingency. The right number depends on your overhead — use the hourly rate calculator to pin that down.
Frequently asked questions
What’s the difference between markup and margin?
Markup is profit divided by cost. Margin is profit divided by price. For a $100 cost sold at $125, the markup is 25% ($25 / $100) but the margin is 20% ($25 / $125).
How do I convert markup to margin?
Margin = markup / (1 + markup). So a 25% markup equals a 20% margin, and a 50% markup equals a 33.3% margin. The cheat sheet on this page lists the most common conversions.
Which should I price from — markup or margin?
Either works as long as you’re consistent, but margin is the number that reflects the profit you actually keep from each dollar of revenue. Set a target margin first, then back into the markup you need.
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