Markup vs margin calculator for contractors
Markup is profit as a percent of cost. Margin is profit as a percent of price. A 50% markup is a 33.3% margin, which is why contractors who 'add 20%' end up with less than 20%. Enter a cost to convert both ways.
Price at this markup$1,500.00
- Margin at this markup
- 33.3%
- Profit
- $500.00
- Price for the margin you want
- $1,666.67
- Markup that gets there
- 66.7%
Runs in your browser. Nothing you type is sent or saved. The result is an estimate from your own inputs, not a quote.
The formulas
- Price from markup = cost x (1 + markup).
- Margin = (price minus cost) / price.
- Price from margin = cost / (1 minus margin).
- Markup needed for a margin = margin / (1 minus margin).
Markup to margin chart
| Markup | Margin |
|---|---|
| 20% | 16.7% |
| 25% | 20% |
| 33.3% | 25% |
| 50% | 33.3% |
| 66.7% | 40% |
| 100% | 50% |
If your overhead runs 30% of revenue and you mark jobs up 30%, your margin is 23.1% and every job loses money before profit. Price from margin.
Check it on real jobs
The margin you quote and the margin you keep are different numbers once change orders, dump fees and extra trips land. Use the job profit calculator on a finished job. Alvin can pull estimated and actual costs per job from QuickBooks and flag the jobs that came in under your target, so you see it the same week. See job costing in QuickBooks.
Frequently asked questions
What is the difference between markup and margin?
Both describe the same profit, measured against different things. Markup divides profit by cost. Margin divides profit by price. Margin is always the smaller percentage.
What markup gives a 50% margin?
A 100% markup. Doubling your cost means half the price is profit.
Should contractors price with markup or margin?
Margin, because overhead and profit targets are measured as a share of revenue. Decide the margin you need, then convert it to a markup for estimating.
The math is the easy part. Alvin does the office work after it.
Alvin is the personal assistant for home services businesses. Your team asks in the app or forwards an email, and Alvin does the work across QuickBooks, your CRM and your suppliers. Anything that spends money or goes to a customer waits for your approval.