Markup vs Margin Calculator
Mixing these up is one of the most expensive arithmetic errors in contracting, and it's easy to make. Put your numbers in below — no signup, nothing to install.
Material, labor, equipment — everything the job costs you.
Charge the customer
$14,285.71
$4,285.71 profit · 42.9% markup · 30.0% margin
If you added 30.0% as markup instead
You'd charge $13,000.00 and collect only 23.1% margin — not the 30.0% you wanted. That's $1,285.71 of profit missing from this one job.
Cost
$10,000.00
Profit
$4,285.71
Price
$14,285.71
Nothing is stored or sent anywhere — this runs entirely in your browser.
Why this trips people up
Markup and margin describe the same dollars measured against different bases. Markup is a percentage of your cost. Margin is a percentage of your price. Because price is always larger than cost, the margin number is always smaller than the markup number for the same job.
| If you want this margin | You need this markup | On $10,000 cost, you charge |
|---|---|---|
| 10% | 11.1% | $11,111 |
| 15% | 17.6% | $11,765 |
| 20% | 25.0% | $12,500 |
| 25% | 33.3% | $13,333 |
| 30% | 42.9% | $14,286 |
| 35% | 53.8% | $15,385 |
| 40% | 66.7% | $16,667 |
| 50% | 100.0% | $20,000 |
The costly version of this mistake
A contractor who needs 30% margin but adds 30% markupcollects about 23% margin instead. On $500,000 of annual cost, that's roughly $64,000 of profit that never shows up — without a single thing going wrong on any job.
Common questions
What is the difference between markup and margin?
Markup is calculated on your cost. Margin is calculated on your selling price. If a job costs you $1,000 and you sell it for $1,200, that is 20% markup but only 16.7% margin. The dollar amount is identical — the two numbers describe the same $200 measured against different bases.
Why do contractors lose money confusing markup and margin?
Because applying a markup percentage when you meant margin always undercharges. A contractor who needs a 30% margin but adds 30% markup collects about 23% margin instead — roughly a quarter less profit than intended on every job. Repeated across a year of bids, that gap is the difference between a healthy year and a break-even one.
What markup do I need for a 30% margin?
About 42.9%. The formula is markup = margin ÷ (1 − margin). For 20% margin you need 25% markup; for 40% margin you need 66.7% markup. The gap widens quickly as the target margin rises, which is why the mistake gets more expensive on higher-margin work.
Should overhead be included in cost before applying markup?
Most contractors apply overhead to the job cost first, then add profit on top of that total. Treating overhead as if it were profit is a common way to end up working for free — overhead is a cost you have already incurred, not earnings.
This is one number out of a whole bid
Pro Spec IQ applies overhead, profit, and contingency across your material, labor, and equipment automatically — with trade-specific inputs and a proposal you can send straight to the customer.