Markup calculator
Enter what a job, part or material costs you and the markup you want, and see the price to charge, your profit and the margin. Built for contractors and small businesses pricing estimates, with a markup-to-margin converter below.
Last updated · By Yasir Arfat
Markup calculator
Enter your cost and markup to get the selling price, your profit and the margin it works out to.
- Selling price
- $500.00
- Profit
- $100.00
- Gross margin
- 20.0%
Markup is profit as a share of cost. Margin is profit as a share of the price, so it is always the smaller number.
Put the price on an estimate →Price from a target margin
Know the margin you need? Enter your cost and target margin to get the price to charge.
- Price to charge
- $500.00
- Profit
- $100.00
- Markup on cost
- 25.0%
Price = cost ÷ (1 − margin). A 20% margin needs a 25% markup, not 20%.
Markup and margin from cost and price
Already have a price? See the markup and margin you are actually making.
- Markup
- 30.0%
- Gross margin
- 23.1%
- Profit
- $120.00
A negative markup means the price is below your cost.
The markup formula
Selling price = cost × (1 + markup %). Markup is the profit you add, as a share of your cost: (price − cost) ÷ cost. A part that costs you $80 with a 25% markup sells for $80 × 1.25 = $100.
Margin = (price − cost) ÷ price. It is the same profit as a share of the price, so it is always smaller than the markup. On that $100 sale, the $20 profit is a 25% markup but a 20% margin.
Markup to margin conversion table
| Markup | Margin | $100 cost sells for |
|---|---|---|
| 10% | 9.1% | $110.00 |
| 15% | 13% | $115.00 |
| 20% | 16.7% | $120.00 |
| 25% | 20% | $125.00 |
| 30% | 23.1% | $130.00 |
| 33.3% | 25% | $133.30 |
| 40% | 28.6% | $140.00 |
| 50% | 33.3% | $150.00 |
| 75% | 42.9% | $175.00 |
| 100% | 50% | $200.00 |
To go the other way, markup = margin ÷ (1 − margin). A 30% margin needs a 42.9% markup.
How contractors use markup
- Know your overhead first. Add up a year of costs that are not tied to one job (vehicle, insurance, tools, office, your own admin time) and divide by your yearly job costs. That percentage is the least your markup has to cover.
- Mark up materials and subcontractors. You order, collect, store and stand behind them. A markup on materials pays for that time and the risk of returns and waste.
- Price labor from a loaded rate. Start from wages plus labor burden, then add overhead and profit. The contractor labor rate calculator does this for you.
- Don't confuse markup with margin. If you need a 20% margin to stay in business and you add 20% markup, you end up with 16.7%.
Example: marking up a small job
A bathroom fan replacement costs you $140 in parts and 2 hours of labor at a loaded cost of $45 an hour. With a 25% markup on parts and labor billed at $75 an hour, the customer pays $175 for parts and $150 for labor, $325 in total. Put those lines on an estimate before the job and turn it into an invoice when you finish. Trade templates like the construction estimate keep labor and materials in separate tables.
Questions about markup
How do you calculate markup?
Markup is profit divided by cost. Selling price = cost × (1 + markup). For example, a $400 cost with a 25% markup sells for $400 × 1.25 = $500, a $100 profit.
What is the difference between markup and margin?
Markup is profit as a percentage of your cost. Margin is profit as a percentage of the selling price. On a $400 cost sold for $500, the markup is 25% ($100 ÷ $400) but the margin is 20% ($100 ÷ $500).
What markup do I need for a 20% margin?
25%. To turn a margin into a markup, divide the margin by (1 − margin): 0.20 ÷ 0.80 = 0.25. The table on this page lists the common pairs.
What markup do contractors use?
It depends on the trade, the job size and your overhead. Many contractors add one markup to cover overhead and profit on the whole job, and a separate, smaller markup on materials. Work out your overhead first, then set a markup that covers it and leaves the profit you want.
Should I show markup on an invoice or estimate?
Usually not as a separate line. Put the marked-up price on each item, or give a total for labor and a total for materials. Customers compare prices, not your markup.
Is a 50% markup the same as a 50% margin?
No. A 50% markup is a 33.3% margin. A 50% margin needs a 100% markup, which means doubling your cost.
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