Free Markup & Profit Calculator for Contractors
Enter what the job costs you and the markup you want, or the price you’re thinking of charging. You’ll see the price, the profit in dollars, and the margin you actually keep. Most contractors who come up short on profit priced with markup but planned with margin.
Results
Common markups
| Markup | Margin | On $10,000 cost |
|---|---|---|
| 10% | 9.1% | $11,000 price |
| 15% | 13% | $11,500 price |
| 20% | 16.7% | $12,000 price |
| 25% | 20% | $12,500 price |
| 30% | 23.1% | $13,000 price |
| 35% | 25.9% | $13,500 price |
| 40% | 28.6% | $14,000 price |
| 50% | 33.3% | $15,000 price |
| 75% | 42.9% | $17,500 price |
| 100% | 50% | $20,000 price |
How to calculate markup and margin
Price = Cost × (1 + Markup %)
Profit = Price − Cost
Markup % = Profit ÷ Cost × 100
Margin % = Profit ÷ Price × 100
Margin from markup = Markup ÷ (1 + Markup)
Markup from margin = Margin ÷ (1 − Margin)
Markup is measured against your cost. Margin is measured against the price. The same dollars of profit are always a bigger markup than margin.
Examples
A bathroom remodel at 25% markup
Direct cost is $40,000. Price = $40,000 × 1.25 = $50,000. Profit = $10,000. Markup = 25%, but margin = $10,000 ÷ $50,000 = 20%.
Hitting a 30% margin
You want to keep 30% of the price. Markup = 0.30 ÷ (1 − 0.30) = 42.9%. On a $20,000 cost the price is $28,571 and the profit is $8,571, which is 30% of the price.
Markup & Profit Calculator: common questions
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 price. A job that costs $10,000 and sells for $12,500 has a 25% markup and a 20% margin. Same dollars, different base.
What markup should a contractor use?
Many remodelers and builders mark up direct costs between 25% and 50% to cover overhead and profit. The right number depends on your overhead. Work out your overhead first, then pick a markup that covers it and leaves the profit you want.
How do I convert markup to margin?
Divide the markup by 1 plus the markup. 25% markup is 0.25 ÷ 1.25 = 20% margin. 50% markup is 0.5 ÷ 1.5 = 33.3% margin.
How do I convert margin to markup?
Divide the margin by 1 minus the margin. A 20% margin needs 0.2 ÷ 0.8 = 25% markup. A 30% margin needs 42.9% markup.
Why is my profit lower than my markup?
Because profit is usually measured against revenue. If you mark up 20% and expect to keep 20% of what you bill, you’ll keep 16.7% instead. On a $48,000 job that’s about $1,600 less than you planned.
Should overhead be part of my cost?
You can do it either way, but be consistent. Most contractors put only direct costs (labor, materials, subs, equipment) in the cost and set a markup big enough to cover overhead and profit. The breakdown rows above let you add overhead in if you prefer.
Is 100% markup the same as 50% margin?
Yes. Doubling your cost is a 100% markup, and half the price is profit, so the margin is 50%.
Can I mark up materials and labor differently?
Yes, and many contractors do. Run each piece through the calculator separately, or use an estimating tool that lets you set a markup per line or per category.
Does this calculator save my numbers?
No. Everything runs in your browser. The link in the address bar holds your inputs, so you can bookmark it or send it to someone.
Talk to a person who knows remodeling.
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