Materials, labor, everything you pay out.
Switch the toggle to see it the other way.
If you meant margin, you are $3,250 light on this one job.
You would have needed to charge $13,000 to hit 50% margin. Across fifty jobs a year that is $162,500.
The difference, in one line each
Markup is profit over cost
You start from what you paid and add a percentage on top. $100 of cost plus 50% markup is $150.
Margin is profit over price
You start from what the customer pays and ask how much of it you kept. $50 of the $150 is 33%, not 50%.
Same job, same fifty dollars, two different percentages. The trouble starts when somebody decides they need a 40% margin and then adds 40% to their cost, which quietly delivers 28.6%.
Common questions
What is the difference between markup and margin?
Markup is profit measured against your cost. Margin is profit measured against the price the customer pays. $100 of cost plus a 50% markup is $150, and the $50 you kept is a 33.3% margin, not 50%.
What markup do I need for a 30% margin?
A 42.9% markup. To keep 30% of the price, divide your cost by 0.70 rather than adding 30% to it. Adding 30% to cost gets you a 23.1% margin, which is the mistake that quietly costs the most.
Is a 50% markup the same as a 50% margin?
No. A 50% markup is a 33.3% margin. To actually make a 50% margin you have to mark up 100%, which is to say double your cost. The two numbers only agree at zero.
How do you calculate markup?
Divide your profit by your cost. A job that cost you $1,000 and sold for $1,400 made $400, and $400 over $1,000 is a 40% markup. Going the other way, price is cost times one plus the markup: $1,000 times 1.40. The calculator above does both directions.
How do you figure markup percentage from a price?
Subtract cost from price, then divide by cost. $1,400 minus $1,000 is $400, and $400 divided by $1,000 is 0.40, so 40%. If you divide by the price instead you get 28.6%, and that number is your margin, not your markup.
How do you calculate margin percentage?
Profit divided by price, not by cost. On the same $1,400 job with $1,000 of cost, $400 divided by $1,400 is 28.6%. That is the share of the customer's money you kept, which is the number a lender, an accountant or a bid comparison usually means by margin.
How do you convert markup to margin?
Margin equals markup divided by one plus markup. A 40% markup is 0.40 divided by 1.40, which is 28.6% margin. To go back the other way, markup equals margin divided by one minus margin: a 30% margin is 0.30 over 0.70, a 42.9% markup. The table lower down has the common pairs worked out.
Markup to margin, at a glance
| If your markup is | your margin is | to get that margin, mark up |
|---|---|---|
| 10% | 9.1% | 11.1% |
| 15% | 13.0% | 17.6% |
| 20% | 16.7% | 25.0% |
| 25% | 20.0% | 33.3% |
| 30% | 23.1% | 42.9% |
| 40% | 28.6% | 66.7% |
| 50% | 33.3% | 100.0% |
| 60% | 37.5% | 150.0% |
| 75% | 42.9% | 300.0% |
| 100% | 50.0% | not possible |
Read the last column as: to actually keep 30%, you have to mark up 42.9%.
The same math, in your trade
Every trade page below prices work the same way: from what the job costs you, at the margin you set, with markup and margin labelled separately so they never blur.
- Job costing for plumbers
- Job costing for electricians
- Job costing for hvac companies
- Job costing for general contractors
- Job costing for painting companies
- Job costing for woodworking & carpentry businesses
- Job costing for roofing companies
- Job costing for cleaning companies
- Job costing for handyman businesses
- Job costing for pest control companies
- Job costing for landscaping companies
- Job costing for pool service companies
- Job costing for appliance repair companies
- Job costing for garage door companies
- Job costing for exterior cleaning companies
Or stop doing this by hand.
HomeServicesIT prices every estimate off your cost and the margin you set, and labels margin and markup separately on screen so the two can never get mixed up again. Enter thirty squares and it builds the whole material list already priced.
Plans start at $29 a month and every plan prices from cost. Just need to write one quote today? The free quote builder needs no account, and the contractor quote template shows what goes on one. And if the question is bigger than markup, here are the ones contractors ask their software.