Markup vs margin, worked out both ways
Enter what a job costs you and any one of markup, margin or price. The calculator fills in the other two and shows a conversion table, so a 50% markup never gets mistaken for a 50% margin.
| Markup | Margin | Price on your cost |
|---|
Margin = markup ÷ (1 + markup). Markup = margin ÷ (1 − margin). To hit a margin, divide cost by (1 − margin).
Markup is profit as a percentage of cost; margin is profit as a percentage of the selling price. Margin = markup ÷ (1 + markup), and markup = margin ÷ (1 − margin). A $1,000 job at a 50% markup sells for $1,500, which is a 33.3% margin. To earn a 50% margin you need a 100% markup: price = cost ÷ (1 − 0.50) = $2,000.
How to use the markup vs margin calculator
Enter your cost
Labor at your cost per billable hour plus materials at what you paid for them.
Enter one more number
Type a markup %, a margin % or a selling price. The other two fill in as you type.
Check the table
The table shows common markups, the margin each one really gives and the price on your cost.
What the markup vs margin calculator does
Three-way solve
Cost plus markup, margin or price gives the other two, with the gross profit in dollars.
Target margin pricing
Enter a margin and get the price straight from cost ÷ (1 − margin), the formula price books use.
Conversion table
Markups from 10% to 200% with the margin each one produces and the price on your cost.
Quick convert
Turn any markup into a margin, or any margin into a markup, without entering a cost.
Loss warning
Flags a price below cost before it goes on a quote.
- Margin formula
- (price − cost) ÷ price
- Markup formula
- (price − cost) ÷ cost
- Price for a target margin
- cost ÷ (1 − margin)
- Cost and privacy
- Free, no sign-up; nothing leaves your browser
Markup vs Margin Calculator FAQ
What is the difference between markup and margin?
Both measure the same profit in dollars, divided by different numbers. Markup divides the profit by your cost; margin divides it by the selling price. A job that costs $1,000 and sells for $1,500 has a $500 profit, a 50% markup and a 33.3% margin.
How do I convert markup to margin?
Divide the markup by one plus the markup, using decimals. A 25% markup is 0.25 ÷ 1.25 = 20% margin; a 100% markup is 1 ÷ 2 = 50% margin.
What markup do I need for a 30% margin?
Divide the margin by one minus the margin: 0.30 ÷ 0.70 = 42.9% markup. Or skip the markup and price directly: cost ÷ 0.70.
Why do contractors lose money confusing the two?
Because a markup always gives a smaller margin than its number suggests. If your overhead and profit goal needs a 30% margin and you add a 30% markup, you get about 23% and miss your target on every job.
Should I use markup or margin to price jobs?
Set your targets as margins, since overhead and profit are shares of revenue on your books, then price with cost ÷ (1 − margin). Many shops still apply a markup to materials; just check the job's total margin with this calculator.
What counts as cost?
Everything the job uses: labor hours at your cost per billable hour (wage, burden, truck and overhead) plus materials, permits and disposal at what you pay. Our labor rate calculator works out the hourly cost.
Where the numbers come from
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