Markup calculator for contractors
Markup is gross profit as a percent of the job cost. Margin is gross profit as a percent of the price. To price a job at a target margin, divide the cost by one minus the margin: a $1,000.00 job at a 35% margin sells for $1,538.46, a 53.8% markup. Type the job's material, labor and sub costs below, then pick a margin, a markup or overhead and profit. Free, no account.
The job
Type what the job costs you before any markup. It starts with the gutter job worked through below.
Share of the price you keep
- Materials
- $413.00
- Labor
- $354.00
- Job cost
- $767.00
- ÷ (1 − 35% margin)
- $1,180.00
- Price
- $1,180.00
A 35% margin is a 53.8% markup on cost. Marking the cost up 35% instead would keep only 25.9% of the price.
Worked out in your browser from the numbers you type. Nothing is looked up or saved. The price comes from the costs and percents you type. The starting job uses example costs. They are not market prices. Confirm every number on site.
Markup to margin conversion table
The same gross profit is a bigger percent of the cost than of the price. Margin = markup ÷ (1 + markup). Markup = margin ÷ (1 − margin).
Markup to margin
| Markup | Multiply cost by | Margin |
|---|---|---|
| 10% | 1.10 | 9.1% |
| 20% | 1.20 | 16.7% |
| 25% | 1.25 | 20% |
| 30% | 1.30 | 23.1% |
| 40% | 1.40 | 28.6% |
| 50% | 1.50 | 33.3% |
| 60% | 1.60 | 37.5% |
| 75% | 1.75 | 42.9% |
| 100% | 2.00 | 50% |
Margin to markup
| Margin | Divide cost by | Markup |
|---|---|---|
| 10% | 0.90 | 11.1% |
| 15% | 0.85 | 17.6% |
| 20% | 0.80 | 25% |
| 25% | 0.75 | 33.3% |
| 30% | 0.70 | 42.9% |
| 35% | 0.65 | 53.8% |
| 40% | 0.60 | 66.7% |
| 45% | 0.55 | 81.8% |
| 50% | 0.50 | 100% |
How to price a job from its costs
Start from what the job costs you, then set the price from the share of it you want to keep.
- Add up the direct costs: materials, your crew's labor at loaded cost, subs, rentals and dump fees.
- Pick the margin the job has to earn: your overhead as a share of sales plus the profit you want.
- Divide the cost by one minus that margin. That's the price.
- Check it: gross profit ÷ price should equal the margin you picked.
Labor at loaded cost means wages plus payroll taxes, comp and benefits. The labor burden calculator works it out per hour.
ExampleA 118 ft gutter job, one story
- Materials: 118 ft × $3.50
- $413.00
- Labor: 2 installers × $45.00/hr ÷ 30 ft/hr = $3.00/ft
- $354.00
- Job cost
- $767.00
- ÷ (1 − 35% margin)
- $1,180.00
- Gross profit
- $413.00
- Markup on cost
- 53.8%
That price is $10.00 a foot, Measured Bid's sample one-story gutter rate. The footage is the sample house; the costs are the gutter pricing guide's example inputs. They are not market prices.
The common mistake: marking up by the margin you wanted
Adding 35% to the cost does not keep 35% of the price. The gap grows as the target goes up, and it comes out of your profit.
Target margin vs what a same-number markup keeps
| Target margin | Markup needed | Same % markup keeps |
|---|---|---|
| 20% | 25% | 16.7% |
| 25% | 33.3% | 20% |
| 30% | 42.9% | 23.1% |
| 35% | 53.8% | 25.9% |
| 40% | 66.7% | 28.6% |
| 50% | 100% | 33.3% |
ExampleThe same gutter job marked up 35%
- Job cost
- $767.00
- × 1.35
- $1,035.45
- Margin it keeps
- 25.9%
- Price at a 35% margin
- $1,180.00
- Short on this one job
- $144.55
Every job priced this way comes in 12.2% under the price you meant to charge.
Overhead and profit: 10 and 10, three ways
Contractors and adjusters call 10% overhead and 10% profit “10 and 10.” The price depends on what each percent is taken from. All three methods below are in use, so say which one you mean.
- Add up a year of overhead: office, trucks, insurance, marketing and any salary not charged to jobs.
- Divide it by a year of sales. That's your overhead percent.
- Add the profit percent you want. Together they're the margin to price at.
- Price each job with that margin, or convert it to a markup with the table above.
Example10% and 10% on a $10,000 job cost
| Method | Price | Markup | Margin |
|---|---|---|---|
| Both on cost 10% of cost + 10% of cost | $12,000 | 20% | 16.7% |
| Stacked 10% of cost, then 10% of cost plus overhead | $12,100 | 21% | 17.4% |
| Shares of the price Cost ÷ (1 − 10% − 10%) | $12,500 | 25% | 20% |
Only the last row keeps 10% of the price for overhead and 10% for profit. The pricing guides on this site use that method with 15% overhead and 20% profit.
Build the markup into your rates
Measured Bid prices every estimate from your own rates: a price per foot of gutter, per square of roof or per square foot of wall. Enter an address and it measures the house, then multiplies each measurement by your rate. Those rates should already carry your overhead and profit.
The gutter pricing guide builds a per-foot rate the same way this page prices a job: material and labor per foot, divided by the share you keep. Do it once per trade, and every estimate comes out at your margin.
Pricing guides that use this math
Each guide builds its rates from cost, overhead and margin, with a worked example.
FAQ
What is the difference between markup and margin?
Markup is gross profit as a percent of your cost. Margin is gross profit as a percent of the price. A job that costs $1,000 and sells for $1,500 has a 50% markup and a 33.3% margin. The dollars are the same. Margin is the smaller percent because the price is bigger than the cost.
Is a 30% markup the same as a 30% margin?
No. A 30% markup gives a 23.1% margin. To keep 30% of the price, mark the cost up 42.9%, or divide the cost by 0.70. The table on this page converts markup to margin and back.
What is a 40% markup on $100?
$140. Multiply the cost by 1.40. The $40 of gross profit is 28.6% of the $140 price, so a 40% markup is a 28.6% margin.
How do I price a job from a target margin?
Divide the cost by one minus the margin. For a 35% margin on a $1,000 job, divide by 0.65 to get $1,538.46. Multiplying the cost by 1.35 gives $1,350, which is only a 25.9% margin.
What markup should a contractor use?
Work it out from your own books. Your overhead as a percent of sales plus the profit you want as a percent of sales is the margin to price at. Convert it to a markup with the table on this page. The pricing guides on this site use 15% overhead and 20% profit, a 35% margin, which is a 53.8% markup on cost.
How do you calculate overhead and profit?
Add up a year of overhead: the office, trucks, insurance, marketing and any salary not charged to jobs. Divide it by a year of sales for your overhead percent, then pick a profit percent. Put 10% and 10% on a $10,000 cost and the price is $12,000, or $12,100 if profit also goes on the overhead. Both keep less than 20% of the price. To keep 10% and 10% of the price, divide the cost by 0.80 for $12,500.
Related pages and tools
Price every estimate at your margin
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